- Financial officers at companies with money held at Silicon Valley Bank (NASDAQ:SIVB) are re-evaluating their cash-management strategies.
- “The big lesson is that you can’t assume that a bank is too big to fail,” said David Henry, chief financial officer at medical-robotics maker Myomo Inc (NYSE:MYO). “You have to be able to diversify your cash as you can.”
- Many of SVB’s clients were startups with small finance teams. Now, these companies are scrambling to move cash to where they can make it available for payroll and diversifying bank accounts, writes Wall Street Journal
- “Cash and cash management is so important because suddenly suppose you are CFO of a company which needs cash today, you’re screwed,” said Sandeep Sahai, chief executive at Clearwater Analytics Holdings Inc.
- EyePoint Pharmaceuticals Inc (NASDAQ:EYPT) plans to keep its deposits in the “low-single-digit” millions at the SVB bridge bank set up by regulators but is prepared to move them to an alternative bank if SVB were to wind down, CFO George Elston said.
- Related: Silicon Valley Bank Creditors Purchased Bonds At Distressed Levels Anticipating Potential Bankruptcy Sale.
- The company said it also has about $40 million in outstanding debt from SVB. EyePoint’s debt agreement obligated it to use SVB for commercial banking and asset management service, Mr. Elston said.
- Other companies already had some of these cash-management practices in place.
- CareCloud Inc (NASDAQ:CCLD) had diversified bank accounts when SVB collapsed, said CFO Bill Korn.
- The company announced an increased credit line with SVB of $25 million last month, though the CFO said he hadn’t drawn on the available capital as of Friday.
- Photo by gguy on Shutterstock
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