Small businesses in Utah breathed a sigh of relief after averting a potential disaster caused by the collapse of Silicon Valley Bank.
Thousands of owners of small businesses and startups were left scrambling to figure out how to meet their next payroll when accounts were locked up last week.
Gavin Christensen, founder and general partner of Kickstart, a company that helps fund new business ideas in Utah and the West, explained that Silicon Valley Bank was the “startups Bank,” and the collapse impacted small companies the most.
Without the guarantee that depositors would be protected, these small businesses faced layoffs, furloughs, and even shutting down.
Fortunately, an announcement was made on Monday at both the state and federal level that guaranteed depositors would be protected.
This was important for the economy, as payroll and jobs were at risk, and confidence in the banking system was eroding.
Kickstart has about 200 active companies and was focused on helping tech startups, who already face many challenges in getting up and running.
The collapse of Silicon Valley Bank and the subsequent freezing of bank accounts was one more thing these startups didn’t need.
Cat Kennedy, a representative from Kickstart, explained that the collapse hit the little guy hardest, not the big tech companies that people might assume.
It was individuals, the founders of companies of all sizes, who were most affected.
Kennedy and her team spent the weekend helping these individuals find solutions, relieved that help came just in time to prevent an even bigger disaster.