Etsy's bank fails... what next?

[#1]

The collapse of Silicon Valley Bank today is awful news.  I wonder what this means for Etsy sellers and funds.  

https://www.wsj.com/articles/after-silicon-valley-bank-fails-tech-startups-race-to-meet-payroll-4ebd9c5c

[WestofChelsea]

well if that's true then I should have my money deposited rather quickly right?  

[PriddeyThings]

@WestofChelsea

Not necessarily - it will take them some time to reroute the payments and it was a Friday. They have already said they used SVB for processing 'some' payments. They use multiple banks.

[barkrock]

I wonder if those "some accounts" weren't possibly all of North America - or at least all of US.

Since Etsy is quite international, US could easily constitute "some" of its customer base.

[InterStore]

SVB BANK IS GUARANTEED BY FDIC

For turkey svb bank was not seen as etsy source of transfers

Turksih seller receive deposits from other american Banks 

Beside american fdic sequezed svb bank funds as guarantor for deposits.

What comes next may be worse for all,

There are 10 to 20 Banks to collapse This will bring worse , credit contraction, fall in disposable consumer income

Slower sales here...

Even if we escape mounth of monster its Tail will strike us terribly 

[greenmelonstudios]

They are only insured by the FDIC for $250,000

[TimeSpanTreasures]

This is from an article in Time Magazine:

"But more than 85% of the bank’s deposits were uninsured, according to estimates in a recent regulatory filing. That’s because FDIC deposit insurance is meant for everyday bank customers and maxes out at $250,000. Many Silicon Valley startups had millions, or even hundreds of millions of dollars deposited at the bank—money they used to run their companies and pay employees. Right now, nobody’s sure how much of that cash is left."

[TimeSpanTreasures]

https://time.com/6262009/silicon-valley-bank-deposit-insurance/

[bradgoodell]

Start-ups are usually running in the negative and are using VC money to pay their bills, so yes, they have millions tied up.

Etsy is not a start-up.  They have steady cash flow and lots of cash, investments, and assets.  

Therein lies the difference.  

[TimeSpanTreasures]

Yes, that is true.

I wish Etsy would make some kind of  statement to reassure everyone, as Roku has in this article:

https://www.cnbc.com/2023/03/10/roku-says-26percent-cash-reserves-stuck-in-silicon-valley-bank.html

[PillowDetails]

26% is a LOT of eggs in one basket.  

[TimeSpanTreasures]

@PillowDetails 

We have no idea what percentage Etsy has in SVB.

I give Roku credit for addressing the issue publicly.

[SewNSewSister]

I decided to put my shop in Vaca mode also. My monies due me will just get eatin' up by daily continuing E fees. And I don't think I want to tackle any possible probs with orders. What a Fiasco for ALL of us. Stay tuned...

[CraftyCornishMaids]

It not a fiasco for ALL of us,

It's definitely not for me.

[JMOldeVintage]

IMO everyone needs to have a Plan B for the important things in life. Finances fall into the category of important.
Obviously what anyone plans to do in the event of a setback or does do is based on their current individual situation. In light of the recent economic turmoil, some may have already gone to Plan B & may now be stretched thin. 

Hopefully Etsy had a Plan B and that it will be put into practice on Monday. If they didn't have a backup plan, well, maybe they will use this as a learning experience and get one in place. 
Either way, I do feel for shop owners who are concerned about this & that those expecting deposits - rescheduled or regularly planned - do not experience further delays. 

[dayspringcollectible]

People are largely overreacting to this. 

There is little chance of this affecting most other banks.  This bank was used a lot by IPOs, which were needing to borrow more with higher interest rates to meet payrolls.  The bank was financed largely by venture capitalists who instructed their portfolio companies to move their funds.  So the investors in the bank themselves caused the run.  Really stupid!

“This was a hysteria-induced bank run caused by VCs (venture capitalists),” Ryan Falvey, a fintech investor at Restive Ventures, told CNBC. “This is going to go down as one of the ultimate cases of an industry cutting its nose off to spite its face.”

This was a bank created by tech for tech companies.  Very specialized. Not your typical bank at all.  Silvergate Bank closed, but that was due to its exposure to cryptocurrency.  And it did NOT need any federal assistance to cover depositors.

Like the dot com bubble crash in the 90's, and the banking induced recession of 2008, this shows the seedy side of capitalism when its greed is unrestrained and impacts the structures of society.

Because this bank was used heavily by IPOs, it does mean than many of them will likely fail.  So that will cause unemployment in the startup tech industry.

[aLilBiteOfCute]

I don't know if people putting their shops in vacation mode is a good thing either. It seems it kind of puts that panic mode ball rolling. 🤷‍ That can't be good for Etsy at this moment. I'm sure everything will be fine and stabilize soon as far as payments go.

[MissouriCrossing]

I don’t have time for this bs.  But a recession has been  coming. That’s why I went back to get a second degree and got a job.   But I have microbiology chemistry and math homework to do.

So I don’t have time to be making stuff if I don’t even know if I’m getting paid. Who does?    If a big bank can fail, so can Etsy.  

Sellers need to plan accordingly.  It’s been awhile but websites used to go bust frequently.   Everyone should have multiple venues or income streams (job, social security, brick mortar etc).

[dayspringcollectible]

What bs and why wouldn't you get paid?  A bank failed.  It affects depositors.  Etsy uses multiple sources to pay people and are switching people affected by that bank to others.  It's a responsible action on their part.  Few will have their deposits affected, and those that do will be briefly.  It's no big deal.

[aLilBiteOfCute]

@dayspringcollectible

I agree

[TwistedRibbonGA]

I agree with you. I saw on my newsreel that people were going on tik tok saying that etsy couldn't pay their sellers. I understand that sellers are concerned but posting on a public site like that doesn't help anyone. We need to increase sales, not scare people from the site. 

[MissouriCrossing]

Pay me what you owe me!  

https://m.youtube.com/watch?v=oQW2FFt3-A8

[SurnamePro]

Etsy warns sellers of delay in payments

https://www.msn.com/en-us/money/companies/etsy-warns-sellers-of-delay-in-processing-payments-due-to-...

[dayspringcollectible]

And that article was yesterday, refers to Friday's deposits from that bank being delayed (naturally), and switching over to other partners to get the payments out.

So it is only referring to one day's payments being delayed for SOME sellers.  We'll have to wait to see if they are all caught up by Monday or not, but anything on our part is only conjecture.

[Lakikaisupply]

I am already waiting for a deposit made 2/7. Why do sellers have to wait 90 days for Etsy to investigate and ACH payment? 

[PeoplePackages]

I just saw this video, sorry if it's already been posted. Mompreneurs on Etsy hit by SVB collapse and can't pay their bills | Daily Mail Online