Brex CEO is trying to raise over $1B in a weekend for SVB-related bridge loans

Update on Sunday, March 12, 2023: The Federal Reserve announced that Silicon Valley Bank’s depositors will be fully protected and that cash will be accessible starting Monday for both the insured and uninsured. As a result of this announcement, Brex CEO Henrique Dubugras wrote on Twitter that Brex's"emergency payroll loan offer is no longer required," adding that "this is a far better outcome for those customers."

Brex CEO Henrique Dubugras is currently working to raise over a billion dollars in a weekend to help fund an emergency bridge credit line that he believes will help startup customers impacted by Silicon Valley Bank’s collapse be able to make payroll next week. Dubugras declined to comment on how much capital has been committed for the credit line thus far, but said he’s on back-to-back calls trying to get funds locked down.

“We’re working with a lot of lenders this weekend, to basically raise as much money as we can afford,” Dubugras said. So far, over $1.3 billion of payroll loan requests has been made from over 500 applicants. “The same people who are requesting the $1 billion have around 10 billion in aggregate deposits [at SVB]."

The founder says demand is increasing every five minutes. And while Dubugras said that the final close is “TBD,” he said it’s “very likely” they will close some capital.

One question is if the terms of the deal will be favorable to founders, or, as one entrepreneur ominously suggested to me today, will the sharks come out?

Brex is not disclosing the terms of the deal but said that they are not making money on these loans. “That's where we're working through to kind of get what the right rate is, but think about it this way: there's not a lot of information right now and coming up with over a billion dollars in a weekend, it’s no easy feat,” Dubugras said. “So you know, I think that we're just trying to see if we can figure something out that works for everyone and create an option.”

Another question is on the quality of applicants. As one founder told TechCrunch yesterday, onboarding an influx of people “is the easiest way to invite fraud and get kicked out of the banking ecosystems.” Dubugras said that the quality of SVB’s customer base is “pretty good.”

“Most of the customers that we’re getting are real startups that had real businesses with real deposits — and they’re connecting the data to their SVB account that had real money in it,” he said. “We're verifying that these customers are real customers for sure — that is not what I’m worried about.”