Background: The bankruptcy of Silicon Valley Bank has had a widespread impact, particularly on companies that provide payroll services for employees. We have seen a number of companies issuing announcements and updates regarding the situation, and we are closely monitoring developments to help people understand the situation.
***LAST UPDATED AS OF MONDAY, MARCH 13 AT 4:40 PM PT
Special Announcement from Gusto
To our Gusto Customers who use Silicon Valley Bank to Fund Payroll,
We know it’s been incredibly stressful for many of you to try and log into the Silicon Valley Bank portal to send wire funds for payroll. Gusto is doing everything we can to help get your employees paid today.
We’re running payroll for the 3/13 check date even if you were not able to send your wire transfer in on time this morning. Some payments may not arrive until tomorrow. For check dates (after today) throughout the week of 3/13, you’ll still be required to send wire transfers no later than 10:00am PT the day of your check date.
Wire transfers are the surest and more reliable method for payroll given the current situation. ACH transfers from SVB are still not fully reliable unfortunately at this time.
We’ll continue to keep you updated on the best protocols to make sure your team is paid on time and taken care of. As a reminder, Gusto’s payroll operations don’t rely on SVB. We use a redundant system
As a reminder, Gusto’s payroll operations don’t rely on SVB. We use a redundant system of leading national national banks (such as JP Morgan Chase and PNC).
About the Resource Hub
The shutdown of Silicon Valley Bank (SVB) is creating many unexpected challenges for the businesses that used SVB accounts to fund payroll and other business operations.
We’re here to help. We’ve created this resource hub to share updated news, information, and advice as you navigate this difficult time.
This post includes answers for some of the most pressing and basic questions that need answers, from the fastest ways to set up a new bank account to the ins-and-outs of wire transfers, to what you need to do if you’re a Gusto customer who used Silicon Valley Bank to fund your payroll.
We’ve also included a list of options and vendors for short-term liquidity needs and other resources and highlight important things to pay attention to, including the risks of phishing attacks in urgent circumstances.
Please remember this is a changing, fluid situation. We’ll continue to add more insights and updates as they become available.
For Gusto Customers who have used SVB to fund their payroll operations, we’ve emailed you specific instructions and included more details in this blog post. We’ve also set up this email alias for you to contact us with questions: svb-support@gusto.com.
Latest Update from the FDIC
According to
a statement released Sunday, 3/12 jointly by the Secretary of the Treasury, the Federal Reserve Board, and the FDIC, Silicon Valley Bank depositors “will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. We are also announcing a similar systemic risk exception for Signature Bank, New York, New York.”
FDIC Resources
Timely Questions and Answers
Does Gusto use Silicon Valley Bank to fund payroll operations?
Gusto does not use Silicon Valley Bank to fund customer payroll services and operations. Therefore, Silicon Valley Bank’s current situation does not affect our ability to provide payroll services to customers. Gusto utilizes a redundant system of leading banking partners to facilitate our payroll processing and services to provide peace of mind for the unexpected.
What should I do right now If I banked with SVB?
- If you banked at SVB, you may want to consider opening a new account at another banking institution. (See the next question below for details on how you can potentially expedite opening a new bank account.)
- It’s good to proactively gather your own records to determine what accounts you have with the bank, how they are titled and the asset balances they hold for any claims you need to make.
- Closely monitor the FDIC’s website for updates. We’ll add future updates from the FDIC here as well.
With the recent news about SVB customers having access to their funds on Monday, 3/13/23, do I still need to wire my payroll funds?
Yes. To fund your payroll, please follow the wire instructions in your Gusto account to wire the funds. This is the guaranteed way to complete and fund your payroll.
ACH transfers at SVB, at the moment, are not fully reliable. Wire transfers are reliable and the fastest way to process payroll.
I was already debited for my payroll funds. Do I still need to wire?
Yes, we are requiring wires for all payrolls and contractor payments initiated with SVB as the funding method. If Gusto receives successful debits for the payroll or contractor payment, we will be refunding any overpayment ASAP (within 1-3 business days).
If I banked with SVB, how do I process payroll through Gusto?
- To process payroll through Gusto, read these instructions.
- Also, please make sure to only submit one payroll at a time and ensure that each wire you are sending correlates to the exact amount for each individual payroll. If you submit multiple payrolls simultaneously or send a lump sum for all of your payrolls, it could delay the successful completion of paying out your payroll.
If I banked with SVB and I have international contractors, how do I process their payments through Gusto?
- if you have initiated an international contractors payment on 3/9 after 4:00 pm PST or 3/10, they’ve been canceled. You can resubmit these payments after moving to a new bank account and updating it on Gusto.
If my bank is in receivership, will Gusto cover wire fees associated with payroll payments?
Yes, if your bank is in receivership, Gusto will waive wire fees for payroll payments.
Q: My insurance carrier payments are currently set up with an SVB account. Do I need to update the carrier? How?
You will need to work directly with your carrier partners to update payment information. If you already have a login, you should be able to update payment information directly from your profile. If you don’t have a login setup yet, you can find carrier payment instructions listed
here.
What’s the fastest way to open a new bank account if I need to?
- Choose a banking partner that best fits the needs of your business. Here are some potential banking partners, used by customer base, that are known for expediting accounts:
- A potentially faster way to open a new bank account is to visit a physical branch with all of the required documentation for identity verification, which may include:
- A driver’s license
- A passport
- Company Documents needed are likely include:
- Government issued business license
- Certified articles of incorporation
- Proof of Beneficial Ownership
- Partnership Agreement
- Trust Instrument
- IRS Letter with your Employer Identification Number (EIN)
- Financial Statement
I’ve wired funds out of SVB prior to it being closed. Can the FDIC claw back the wire transfer?
- The FDIC generally should not require repayment of funds withdrawn from SBV prior to its failure. The FDIC could seek to reclaim funds in very specific circumstances (such as fraudulent transfer or if the customer did not otherwise have the right to order the withdrawal).
What’s the fastest way to initiate a business wire outside of SVB?
- There are several methods to wire money, but the most common methods are to use bank transfer services and wire transfer services. There may be limits to the amount that can be transferred per day and may be fees associated with the transfer. Check the applicable terms prior to initiating the transfer.
- Information that may be needed for a wire transfer includes:
- Amount
- Recipient’s name
- Recipient’s address
- Account numbers
- Routing numbers
- Financial institution’s address
- Generally domestic wire transfers take 1-3 days (or faster), while international wire transfers can take 3-5 days. Wire transfer times may vary depending on cut-off times, applicable regulations as well as bank holidays. Please keep in mind that wired funds may be irrevocable so confirm details carefully prior to completing and reach out to your financial institution immediately if you notice an error.
- You can usually initiate a wire transfer in person at your bank or financial institution or through your online bank account. You can call your bank directly if you have questions about your wire transfer.
- Please be aware of phishing scams to obtain information from you. The FDIC will not send unsolicited email notifications to claim/unlock/suspend your account. The FDIC, however, will encourage you to correspond with them via the FDIC Claims Portal, a secure web portal.
Which of my SVB accounts are FDIC insured?
How do I access my funds at SVB?
- According to a statement released Sunday, 3/12 jointly by the Secretary of the Treasury, the Federal Reserve Board, and the FDIC, Silicon Valley Bank depositors “will have access to all of their money starting Monday, March 13, 2023.”
I moved my money out of SVB prior to the shutdown. What else do I need to do?
- Be sure to update anyone who sends or receives ACH transfers to/from this account, so that they instead pull funds from (or send funds to) your new bank account.
- Take a look at who has deposited or withdrawn money from your SVB account in the past 90 days and reach out to them with your updated ACH information to ensure you don’t miss any ACH transfers.
How likely is it that my company will eventually recover all of its money from SVB?
- According to a statement released Sunday, 3/12 jointly by the Secretary of the Treasury, the Federal Reserve Board, and the FDIC, Silicon Valley Bank depositors “will have access to all of their money starting Monday, March 13, 2023.”
I have an urgent cash flow issue (e.g. I can’t make payroll). What should I do? How do we get enough liquid funds to make payroll by Wednesday?
- We know some businesses might be facing cash flow issues. Here are several different potential options for you to look into to see if they can help with your business needs:
***Disclaimer: The SVB Resource Hub is intended for informational purposes only. This situation is evolving rapidly, and specific circumstances should be assessed individually. This information does not constitute legal, tax, financial or accounting advice and does not create an attorney-client relationship. If you are seeking legal advice, you are encouraged to consult an attorney.
***Disclaimer: Be aware of phishing scams to obtain information from you (account numbers, social security numbers or requesting transfer of funds.) In times of crisis, there is increased risk of bad actors trying to take advantage of you. The FDIC will not send unsolicited email notifications for claims. The FDIC will not send unsolicited email notifications to claim/unlock/suspend your account. The FDIC, however, will encourage you to correspond with us via the FDIC Claims Portal, a secure web portal.
SOURCE: GUSTO
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