Silicon Valley Bank offered (SVB) a funding gateway to start-ups that no other banks did. A Reddit user explained why technology startups flocked to SVB for loans.

Using the moniker its-saute, the user said: “I will give you a very specific example. We are a small software as a service company. We get paid by our customers year after year for the use of our software, and 90 per cent of them renew their contracts.

“When we went to large banks, the only thing that they would give us as far as a credit line to use to grow the business was a percentage of the accounts receivable that we have. The challenge with that is that our accounts receivable is at any one point of the year not very large and so it really did us no good to borrow when we were going to get the money from the accounts within 45 days anyway.

“A bank like Silicon Valley Bank understood the fact that we have a renewal-based business, and they would lend us more money based on the overall annual value of our contracts, rather than on what we were going to receive in the next 45 days. We would be able to grow our business substantially with a partner like SVB.”

“Without Silicon Valley Bank, you would not have a myriad of companies that you use regularly today.”