SVB’s collapse sends California wineries into a state of uncertainty
SVB’s collapse sends California wineries into a state of uncertainty
While best known for specializing in tech and biotech, Silicon Valley Bank had its hand in another big California sector: high-end wine.
The bank’s collapse came as a shock to winemakers like Adam Lee, founder of Clarice Wine Company based in Sonoma County. When he saw SVB was looking for a buyer, he got nervous.
“That was the moment that things went from, ‘Oh, my God, it’s a horrific day as far as their stock goes,’ to, ‘This could mean some real changes for those of us that are clients of the bank,’” he said.
Lee has been a client of SVB’s since the ’90s and still owes the bank tens of thousands of dollars.
“That is what I don’t know at this moment what’s going to happen with that particular line of credit,” he said.
Silicon Valley Bank was one of the primary banks for California’s wine industry. The bank’s wine division started up in the early ’90s and, since then, has loaned out more than $4 billion to the industry. Until its recent collapse, it had more than 400 winery accounts, according to SVB’s wine division founder Rob McMillan.
Lately, McMillan said he’s been getting a lot of phone calls from concerned clients.
“Some couldn’t make payroll, the apps didn’t work, loans couldn’t be made,” he said. “It’s clearly frustrating, and I don’t blame them for being angry.”
In addition to lending money, SVB was also a big supporter of the region’s most vulnerable workforce: farmworkers.
“We’re going to feel their absence,” said Rosaura Segura, an immigration services provider and farmworker advocate in Napa Valley.
According to Segura, SVB helped raise money for basics like bedding, kitchen supplies and food. She hopes another funder will step up soon with those donations.
As for winemaker Adam Lee, his accounts are now with Silicon Valley Bridge Bank. And he’s not closing them yet, especially now that he has the backing of the federal government.
“In an ironic way, Silicon Valley Bank is the safest place right now to put your money,” he said.
But he did open an account at another bank, just to be safe.
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