Tellus and Silicon Valley Bank: Your questions, answered
Wondering if the Silicon Valley Bank closure could impact Tellus? We’ve got you covered here. Hint: You can be confident your money’s safe with us.
To put it lightly, it’s been a rough few days for the banking and fintech industries. And when the government intervenes with extraordinary measures, we’re not surprised that you might have some questions.
We’re here to help answer your questions following the Silicon Valley Bank news.
1. Was Tellus impacted by Silicon Valley Bank’s closure?
No, Tellus was not impacted as we have zero exposure to Silicon Valley Bank. It’s business as usual for us right now: we’re continuing to serve our customers just how they’ve come to expect, including the regular processing of deposits and withdrawals. That was true last week, it’s true today, and we don’t see that changing in the future. We exist to help customers build wealth responsibly, and we remain committed to that mission.
2. Can what happened to Silicon Valley Bank happen to Tellus?
First, let’s differentiate between Tellus and Silicon Valley Bank.
Tellus is not a bank, so we are built on top of technology layers working with leading banks, each member FDIC insured. We use technology to diversify Tellus’ cash assets and diversification is a good thing.
Customers can withdraw money at any time, and we do generate revenue through real estate lending like many banks.
So, if a multi-billion dollar bank with similarities to Tellus can fail, how is Tellus different?
- Deposit base: We built our product to help anyone and everyone gain access to the wealth-building power of real estate, and we’re grateful to serve customers spanning the country. While we do have some customers with much larger account balances, they are certainly not the majority. Because our deposits come from thousands of different customers and not just a few, we don’t face the deposit concentration risk Silicon Valley Bank did.
- Lending terms: In the current environment, rates have been rising, and we don’t expect that to change in the near future. While this meant trouble for Silicon Valley Bank, it’s important to acknowledge that Tellus doesn’t lend at the same spot or the same rates on the yield curve. Our loans are made with 6 and 12 month time horizons — we don’t lock in rates for 20 or 30 years, nor will we in the future. The short-term loans we offer allow us to charge higher rates, and the short payback period has helped us navigate the rising rate environment. That allows us to steadily move our lending rates in response to the market.
- Risk management: Compared to the multi-billion dollar banks (that are struggling), Tellus is a small player in the industry — and that’s worked to our advantage. As rates have climbed and the overall velocity and volume of mortgage lending in the market has decreased, we’ve been able to remain selective in our lending activity and never take on undue risk. In fact, we’ve never had a single loss on any of our lending activity since our inception. While that track record speaks volumes about our risk processes, we also know that it won’t be the case forever. As we grow, we’re deeply committed to maintaining an appropriate margin of safety in all of our activities, from lending to cash management. We’ve been navigating the volatility in the broader markets these past few days, and we’ll do so in the coming ones.
3. Is my money safe with Tellus?
Yes, your money is safe with Tellus. By using a smarter strategy, offering short-term residential bridge loans, staying prepared for an economic downturn, and protecting your data with the latest security, we uphold our daily priority of keeping your money safe.
If there’s one takeaway from the financial unrest we saw last week, it’s this: Don’t put all your money in a single institution of any size or scope. Diversify your funds to beat inflation and mitigate risk. While the U.S. government has stepped in to reassure depositors and stabilize the system, you’d probably have had some sleepless nights if all your money was concentrated in one place.
Consider adding Tellus to your savings mix today. Your money is safe, you’ll be rewarded with a high yield, and you can withdraw anytime.