Emergency credit line for SVB customers

Re:Emergency credit line for SVB customers by joefigura on Friday March 10, 2023 @07:27PM (#35103425)

Brex could offer loans up to 25% of the borrower's funds stuck in SVB. As long as depositors receive at least 25 cents on the dollar, the loans would be paid back in full, and the borrower would have gotten significant working capital in the interim.

SVB's carcass still has significant assets, so Brex can set that % number based on what they know about SVB's state, to make the loans almost risk-free.

I'm not a banker and no idea if this is actually what they're doing. That page doesn't discuss terms at all. But there's certainly ways to make these loans without much risk, this might be a way to do it.

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Re:Emergency credit line for SVB customers by beberlei on Saturday March 11, 2023 @06:48AM (#35107500)

Loaning money to a startup in this economy is far from risk free. Companies can go bust regardless of getting a part of their cash back

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Re:Emergency credit line for SVB customers by mcherm on Saturday March 11, 2023 @06:56AM (#35107556)

Loaning money to a risky borrower can be practically risk free if the borrower provides collateral. And the deposits in SVB are an excellent example of collateral. They are illiquid, but the funds are being held by the FDIC, which is highly reliable about (eventually) paying out (some portion, not necessarily the full amount).

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