TORONTO : Last week's sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada's technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures, financiers told Reuters.That would be bad news for a sector that took a beating in 2
TORONTO : Last week's sudden collapse of Silicon Valley Bank could choke funding for Canada's technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures, financiers told Reuters.
SVB's Canadian division, which received a license to operate in 2019, competed against other banks and private lenders to help finance the growth of the Canadian technology sector, before it collapsed on Friday. It had doubled its secured loans to C$435 million in 2022 from previous year. U.S. regulators stepped in on Sunday after the collapse of SVB, which had a run after a big bond portfolio hit.
"I think Canadian banks will continue to lend to earlier stage technology companies but without Silicon Valley Bank as a lender, I think they can afford to be much more selective in who they lend to and potentially increase the price at which they lend." "Before SVB went down, accessing capital was increasingly becoming tighter and tighter for Canadians for startups for scale ups," he said.
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