New Delhi: Nearly 10,000 small businesses that had deposits at a Silicon Valley bank will fail to make payroll in the next 30 days, Y Combinator said in a petition to the US government on Sunday, and about 100,000 jobs are expected to be affected.
In a petition to US Secretary of the Treasury Janet Yellen, FDIC Chairman Martin J Gruenberg and other senior government officials, Y Combinator (YC) said that one-third of the startups in its community have a Silicon Valley bank as their only account. used and will fail to do so. Cash to run payroll in the next 30 days. ,Also read: This restaurant gives free food to customers weighing more than 158 kg – read the story,
“By that measure, we can estimate that a payroll-related furlough or shutdown will affect more than 10,000 small businesses and startups. If the average small business or startup employs 10 workers, its furlough, layoff or shutdown will have an immediate impact, affecting over 100,000 jobs in the most vibrant sector of innovation in our economy,” the petition said. ,Also Read: Open Account With Rs 250, Get Rs 2.5 Lakh On Maturity With This Government Scheme: Return Calculator, Check Other Details,
The petition has been signed by over 3,500 co-founders, CEOs, and over 2 lakh employees of startups and small businesses, including Indian entities such as Payo, SaveIn, and SalaryBook.
“Regulators need to operate a backstop for depositors. We are not asking for a bank bailout,” the petition said.
The petition seeks to draw the attention of the government to provide relief for the immediate impact of the SVB collapse on small businesses, startups and their employees.
“According to the NVCA, Silicon Valley Bank has more than 37,000 small businesses with deposits of more than $250,000. These balances are no longer available to them, and without further intervention, according to the FDIC website, may be out of reach for months to years.” stated in the petition.
The petition warns that there is a real risk of systemic contagion from the failure of SVB and that its collapse has already created fear among founders and management teams to look for a safe haven for their remaining cash, which is being liquidated every year. Could trigger a bank run on another smaller bank.
“If we allow this to happen, it will immediately impact the US technology industry and US competitiveness around the world, and ultimately set back US competitiveness for a decade or more,” the petition said.