Tech companies up and down the country breathed a collective sigh of relief this morning after the Bank of England said HSBC had agreed to rescue the British arm of Silicon Valley bank (SVB) in an eleventh-hour deal.
The central bank said SVB UK’s business will continue to operate and customers would be able to use banking facilities as normal.
Tech firms had been in a panic throughout the weekend after the collapse of the Californian bank left them frozen out of their bank accounts, with many warning they would not survive for more than a few days before running out of cash.
Robert Newry, co-founder of online psychometric testing business Arctic Shores, said he feared for his firm’s future after it lost access to its SVB account, in which the company kept 80% of its cash deposits.
“It felt like I had the carpet pulled under my feet,” he told the Standard. “The funding which I’d worked so hard at to secure for our growth was suddenly not available.
“My wife was in tears having watched me go through the stress of the weekend and when she heard the news this morning she thought it was fantastic.
“For a lot of entrepreneurs, this is your life, this is the one thing you throw yourself into and thing about it 24/7. This news is a massive relief. There are lots of smiley faces this morning.”
Policy unit Coadec director Dom Hallas, who coordinated much of the tech industry’s response to the SVB collapse, told the Standard: “There’s huge relief this morning that there’s going to be a solution and people are going to have access to their accounts.
“The treasury deserve a huge amount of credit for what they’ve done in difficult circumstances. These companies were on the precipice. If SVB had gone insolvent it would have been utter chaos.”
Tech businesses had initially expressed their fury after the Bank of England said SVB had “a limited presence in the UK and no critical functions.” The statement prompted hundreds of tech firms to organise a joint letter to Chancellor Jeremy Hunt, urging rapid action to rescue the bank.
Camilla Easter, CEO of weight loss technology business Oxford Medical Products, said: “We have fantastic innovators in this country and if the government and the Bank of England had allowed [the collapse] to happen it would have sent a strong message that they’re not there to support us.
“The worry is that that great innovation would have gone across to America [without the] confidence that we’re seeing from the government in our sector and their ability to help us get through this.
“It’s been an incredibly stressful few days -- it makes all of our lives so much easier that they’ve been able to do this quickly.”
