When Silicon Valley Bank imploded it took a $70 billion loan portfolio with it. Competitors are already stepping in to fill the gap.
as VC funding dried up and founders strained to extend runway. The bank was willing to work with risky unproven companies that other financial institutions may have shunned and by the time of its demise it held nearly $7 billion of venture debt on its books.
"You're guess is as good as mine, we're going off what we're seeing on CNBC," said a former managing director at Silicon Valley Bank who is now working for the entity created by the FDIC to administer SVB's assets.In the meantime the bank has been accelerating approval of credit line draw requests from existing customers and as of Monday night all borrowers were able to once again access their lines of credit, according to two people familiar with the matter.
Notably, none of those deals was with a bank."There's basically zero demand for bank debt," said Markell, who says that many companies simply aren't willing to take the risk of opening a line of credit with one of the other regional banks that would normally be a go-to Silicon Valley lender such as First Republic or PacWest, lest they also fail.
"They look at the relationship as being centric, and the relationship could be 25 years old and could be hundreds of loans. Nobody will come in and be able to instantly replace that," Spreng said. SVB long prided itself on maintaining deep personal ties with the investors it served.home loans for startup founders
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