Silicon Valley Bank (SVB) has launched a relief initiative that will provide the bank’s venture debt borrowers with loans of $10 million USD or less, an opportunity to defer their principal payments for a period of six months.
Silicon Valley Bank is also participating in the Business Credit Availability Program in Canada.
The deferment is available to SVB clients around the world, including in Canada. The program, intended to support clients during the COVID-19 pandemic, is expected to generate up to $600 million in collective payment relief across the bank’s global client base, SVB estimated. Clients that qualify for the offering will be notified directly by the organization. SVB has not indicated additional qualifications beyond loan size.
“Our response effort is focused on the health and safety of our employees, and serving our clients seamlessly throughout this volatile time,” said Greg Becker, CEO of Silicon Valley Bank. “Our entire team is dedicated to easing the current financial pressures our clients face and contributing to the larger community. We are well-positioned financially to support our clients, and we’re leading with our values as we extend our support.”
The bank has stated it is currently involved in industry discussions to support small businesses and the innovation economy. SVB said it has been in direct communication with the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) as part of the Business Credit Availability Program (BCAP) program. SVB said it has expressed its commitment to support its clients through the available funding options.
BCAP, introduced by the federal government on March 13, aims to improve access to funding for Canadian businesses experiencing cash flow challenges. The loans, which come with a personal guarantee requirement and interest, may not be accessible for Canada’s innovation sector, however, CEOs and innovation groups have argued.
Banks like SVB offering payment deferral comes at a critical time for Canadian startups that are finding themselves strapped for cash amid the current economic slowdown. Speaking with BetaKit, many CEOs have expressed concern about cash flow, noting that current government measures do not necessarily meet the needs of the innovation sector and early-stage startups.
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Other startup funders operating in Canada have also stepped up to support struggling companies. Major banks in Canada like CIBC, RBC, and BMO are offering payment deferrals for small businesses and increased support and advice for those impacted. The Caisse de dépôt et placement du Québec announced Tuesday it will provide $4 billion to businesses in Quebec that have been impacted by the pandemic.
Speaking with BetaKit last week, Raymond Luk, founder and CEO of Toronto-based Hockeystick, said Canada’s funding community is still open for business. Hockeystick recently compiled a list of Canada’s active funders for startups. How COVID-19 will affect venture capital investing, however, remains to be seen. In an open letter to Minister of Small Business Mary Ng last week, the Canadian Venture Capital and Private Equity Association (CVCA) warned of the vulnerability of early-stage startups, calling for more support for investors in order to bolster the ecoystem.
SVB has also set up a COVID-19 response fund, in partnership with London-based charitable initiative Founders Pledge, to support the medical response to the pandemic and mitigate the social cost by providing relief to affected families. SVB has made an initial $1 million investment to the fund, and is inviting interested parties to donate.
The organization has also committed $5.5 million USD to support local, regional, and global activities focused on health security, food security and shelter, and small business owner relief. Additional relief programs and initiatives that are in development for SVB clients will be communicated directly to applicable clients in the coming weeks.
Image source Silicon Valley Bank