Crisis Aversion Playbook: Lessons Learned from the Silicon Valley Bank Collapse

On March 10, 2023, Silicon Valley Bank (SVB) went kaput—regulators stepped in, handed things over to the FDIC, and poof—businesses everywhere collectively gasped. You thought your Friday payroll would clear? Surprise: it landed on SVB’s fail pile and funds sent to Rippling were frozen with looming paycheck dates approaching. This wasn’t an economy apocalypse—it was textbook foolishness in maturity management.

SVB stuffed its books with long-term bonds, neglected interest‑rate hedges, and relied on deposits that evaporated like ice in a heatwave. Especially when hot tech founders hit “withdraw,” the whole house of cards collapsed.

Head spinning yet? Don’t worry—I’ve got your back with a no-drama plan that can offer confidence and preparedness.*

1) Know Your FDIC Coverage (not just vibes)

Here’s the deal: FDIC covers $250,000 per depositor, per bank, per ownership category. Anything above that? Totally uninsured. And — spoiler alert — regulators sometimes bail people out in emergencies, but that’s not a policy. It’s Vegas-level lucky, not reliable.

2) One Bank? Cute. Two (or more)? Smart.

Your strategy shouldn’t be “Betting all my chips on Bank A.” Have at least two banking relationships ready—ACH, wires, logins, sign-offs—the whole shebang. Mirror your critical services: if Bank A runs payroll or merchant services, set up identical rails in Bank B before your back is against the wall.

3) Sweep Networks — the Boring Superpower

ICS® and CDARS®, via IntraFi, let you split your big deposit into sub‑$250k chunks across multiple banks—still manageable from a single relationship. It's FDIC insurance, but without juggling multiple logins. Boring? Maybe. Brilliant? Absolutely.

4) Give Every Dollar a Job

No guesswork allowed:

• Operating Cash (30–60 days): Bank A – bills, payroll, taxes.

• Backup Cash (30–60 days): Bank B – ready for action, always.

• Reserves: Use ICS/CDARS or multiple accounts. Pro tip: Treasury bills and money market funds are fancy—but not FDIC‑insured. Know what you're getting into.

5) Pre-Wire Your Lifelines — Now, Not Later

Set up backup payroll accounts at Bank B, run a $0 test or tiny live payroll. Identify “must‑pay” vendors (rent, SaaS, insurance), store their alternate payment instructions. Your invoice switching game should be Olympic-level fast.

6) Secure Contingent Liquidity Before It’s a Crisis

Line of credit ≈ your emergency superhero. Size it for one payroll + rent + cushion, have collateral sorted, and pass necessary resolutions so you can move cash or open an account without waiting for a prophetic sign.

7) Build Your Banking Emergency Playbook — Print It

One sheet, doing the heavy lifting:

• List account numbers, institutions, SWIFT and after-hours hotlines.

• Limit rules, payroll cutoffs, alternate rails.

• Top 10 vendors, backup methods.

• Decision tree: “If Bank A is down on payroll day at 9 a.m., do X, Y, Z.”

• Attach wire templates, reroute kits, board resolutions, fintech maps.

8) Monthly “Calm‑Under‑Pressure” Checklist (Yes, Every Month)

• Test: Logos, passwords, signers, daily limits at Bank B.

• Refresh your dependency map, especially if providers switch banks.

• Simulate a “Bank A is offline” day—can you still pay payroll and taxes? Without chaos?

9) Communication That Doesn’t Suck

• Internal memo: “Here’s what went down. Here’s our cash runway. Here’s the plan. Next update at __.”

• Client/Customer alert (if you reroute invoicing): Clear remit-to instructions, effective date, and “because our bank had a hiccup.”

• Payroll Provider Contact: Keep your company in their sights regularly so you have a human on your side during an emergency.

• Board/Investor snapshot: Coverage map, liquidity runway, playbook status. Short, sweet, and numbers-based.

10) Carry These Lessons Forward

• SVB didn’t fail because of gloom and doom—it failed bad risk management, uninsured deposits, and lightning-speed bank runs.

• Planning needs to assume hours, not weeks. That’s the new normal.

• Insurance is a safety net—not a strategy. Build real resilience.

TL;DR (But Still Sass-Approved): Bank failures make headlines, but your prep plan keeps the lights (and payroll) on. Set up your backup systems now, test them like the drama they could defuse, and your playbook will be your best non-emergency hero.

Need help sanity-checking your setup? Fluffy Hammer is here with comfort, strength, and experience.

*Not legal, tax, or investment advice. This guide is educational; work with your banker and advisor to tailor a plan to your entity structure, industry, and risk tolerance.