The collapse of Silicon Valley Bank today is awful news. I wonder what this means for Etsy sellers and funds.
A little light at the end of the tunnel this morning... https://community.etsy.com/t5/All-Things-Finance/Uk-seller-deposit-sent-on-sunday/m-p/141530511#M309...
And some further insight into what happened at SVB... https://www.ft.com/content/b556badb-8e98-42fa-b88e-6e7e0ca758b8
Archived version of the FT story at https://archive.is/LZZqs
Here's the joint announcement from Yellen, Powell and Greunberg Federal Reserve Board - Joint Statement by Treasury, Federal Reserve, and FDIC
We wait. One of the other posts mentioned that Etsy is working to get a new bank.
of course but what about their financial situation if they lost money in that bank?
Etsy owes sellers some kind of explanation. Even if it simply regards their current efforts.
This is scary.
This article details Etsy's finances and ends on a positive note.
Late in the afternoon, Etsy sellers on online forums began complaining that their scheduled payout for Friday, March 10 had been automatically delayed until Monday. Some people began to speculate that Etsy may be using SVB and that this massive delay was connected to the bank’s failure.
Now, Etsy issued an email to sellers confirming the reason their scheduled deposit was delayed due to “recent developments regarding Silicon Valley Bank, who Etsy uses to facilitate disbursement to some sellers.”
Etsy further said, “We are working with our other payment partners to issue your deposit as soon as possible.”
The company didn’t provide any further details on how large its exposure is to SVB. However, unlike VC backed startups and smaller tech firms that may have most of their funds in one bank, Etsy should have the financial resources to make sellers whole relatively quickly.
While affected sellers their payout information says March 13 now, the email from Etsy doesn’t offer that specific date. Sellers should expect that payouts could be delayed a little further, depending on how quickly Etsy can arrange for an alternative distribution solution.
For those worried about Etsy’s financial situation, let’s take a brief look at their last financial filings(Form 10-K).
At the end of 2022, the company had $1.2 billion in cash, cash equivalents, and short- and long-term investments. Of that, $921 million was in cash and cash equivalents.
In addition, Etsy has a revolving credit facility (credit line) of $200 million, which was still available in full at the end of the year. In other words, they weren’t using any of it.
Obviously, without knowing the exact exposure the company has to SVB, we believe Etsy should have enough financial resources to pay sellers. It finished the year off better than many of its peers.
Another good sign for sellers is that the company’s stock price has remained stable in after hours trading, further indicating that the “smart money” on Wall Street is not concerned as well.
I doubt Etsy has only one bank. Not everyone is affected by this.
And the FDIC said those insured get their money on Monday. I'm sure Etsy is insured.
FDIC insurance is geared towards individuals, so it's limit is only $250,000. Companies often have millions. They could lose a large portion of their deposits, depending on the total assets of the bank.
I don’t know. I feel like they are telling us. They are working with another bank just so that we will calm down. I don’t understand if we can’t sell and get paid while they keep charging us to renew. Etsy keeps making money and we’re making nothing.
My guess current funds may get held up for a while, but they are undoubtedly working on another payment processor. So worst-case scenario in my view is today's funds maybe a couple of days may not get for a while. Not sure what happens with the new payment processer, may take a while to integrate
In the meantime, my shops are on vacation. Our money in that bank is not going to get to us anytime soon, if at all.
I put my shop on vacation as well
I was wondering about this--if I should go on vacation or change the deposit to monthly--and hope it is sorted by the first of the month.
I have put my shop into indefinite vacation mode. TBF there were other factors behind this decision, but the situation with SVB was the final straw.
I would advise all sellers to do the same, at least until the situation is clarified. There's no point in carrying on if you're not going to get paid.
Our shop too. We have 2 orders we haven't gotten paid for yet. Hope it's resolved by Monday.
I think we have to remember Etsy is a huge company and if we all start putting our shops on vacation, that in the long run hurt you as a seller. This is going to hurt Etsy in so many other ways because people will now be reluctant to purchase there. If you can put your shop on daily deposits and don't ship until you are paid. I made 2 sales this morning and will not ship them until this is resolved. We have to keep faith.
It better mean we still get paid!
I wonder why Etsy would have used only 1 bank for all their finances. Gives a new meaning to the phrase not putting all your eggs in one basket. Even my husband and I have 2 accounts in case if anything was to happen. Sure didn't expect this!!!! Wowser!!!!!!!!!!!!!
we don't even know if etsy had any money in the bank,
they just said payments could be affected, so it could just be one of the payment processors was affected, rather than etsy itself,
and some people were actually getting payments yesterday, (Sunday) before the bail out
and a lot of payments come from banking in Ireland, as it's a lot more tax efficient
and delaing with multi currencies, I would expect them to have a hedge fund or more in the Netherlands.
I have no idea why you think etsy has money in the bank, and if they did, all their money was there
Etsy uses multiple banks, has a $900 million cash reserve, and a $200 million line of credit that was unused as of last report. They hardly have all their eggs in one basket.
Since that bank specializes in IPOs, Etsy probably used that bank when they went public years ago, and maintained a presence there. It is always good to maintain ties to your financial history.
So, if we try now to cancel a sale and refund the customer...they don't get their money back until this is resolved?
That is correct. I've already tried doing that with one customer.
The customer would get paid by you with your cc on file.
Won't Etsy take the refunds out of our credit card accounts?
Who cares, Etsy needs to pay us
if they lost all their money , how could they?