*Please note that due to the rapidly developing situation, the information in this article is correct as of Wednesday 15 March 2023.
On 10 March 2023, California’s banking regulators closed the Silicon Valley Bank Financial Group, marking it the most significant bank failure since the collapse of Lehman Brothers in 2008. Despite a risk of Silicon Valley Bank UK Limited going into insolvency, a rescue deal has been agreed for HSBC to purchase the UK entity.
Silicon Valley Bank is one of the largest lenders to start-ups, particularly in the technology sector, and many venture-backed companies have relied heavily on its services to hold their operating cash. The change in ownership of Silicon Valley Bank in the UK is likely to have an impact on start-ups wanting to apply for a Sponsor Licence [to recruit and retain migrant talent].
To apply for a Sponsor Licence as a start-up, it is mandatory for the company to provide evidence that it has an active corporate bank account with a bank regulated by the Financial Conduct Authority and the Prudential Regulation Authority. It is too early to tell whether HSBC will replicate streamlined onboarding processes for tech companies or whether any other UK banks will offer expedited onboarding for start-ups.
Unfortunately, we foresee that many start-ups will find it challenging to open accounts with traditional UK retail banks; which may result in start-ups experiencing significant delays before they can file their Sponsor Licence applications. This will need to be factored into project timetables. We are liaising with the Home Office to clarify if a temporary concession will be introduced in order to help the start-up companies apply for a Sponsor Licence and will provide further updates as they are available.
In the meantime, if a company has any concerns about its existing Sponsor Licence, or plans to apply for one, they should contact a member of our dedicated Business Immigration Team using the details below.