Etsy is warning sellers about delays in processing payments due to the collapse of Silicon Valley Bank

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A worker walks past a quilt displaying Etsy Inc. signs. at the company’s headquarters in Brooklyn.

Victor J. Blue/Bloomberg via Getty Images

Etsy is warning retailers that the collapse of Silicon Valley Bank on Friday is causing delays in processing payments, according to an email from the company shared with NBC News.

The do-it-yourself online goods mega store said it used SVB to make payments to some vendors, and was working with other payment partners to send deposits. out.

“We wanted to let you know that your deposit scheduled for today has been delayed,” Etsy’s email said.

“We know you count on us to run your business and we understand how important it is that you get your assets when you need them,” the email continued. Please know that our teams are working hard to resolve this issue and get your funds to you as soon as possible.”

Etsy did not immediately respond to a request for comment.

Etsy claims 7.5 million sellers worldwide. SVB’s management went into receivership around noon Friday to end a bank run on the tech lender that had begun Wednesday after it said it was trying to over $2 raise a billion.

One affected Etsy seller told NBC News that the investment delay would have a “catastrophic” impact on his business.

Owen McKinney, who runs the Kentucky Country Home laser engraving business, said in an email that he relies on the deposits to pay for things like shipping and supplies. He said he had already contacted one of his suppliers to delay an order for items he needed for next week.

“At this time, Etsy has not provided a time frame for the investment of the funds,” McKinney said. “Even though I have a website, Etsy is still a big part of my business.”

The drama with SVB started earlier this week when the bank revealed that it sold about $21 billion of securities and proposed to offer more than $1 billion in shares, all to raise money for “purposes general corporation.”

That move raised eyebrows among investors who wondered why SVB needed to raise so much money all of a sudden. It also worried investors, many of whom suddenly wondered if their money was safe and started withdrawing money.

On Friday, the California Department of Financial Protection and Innovation said it was taking over and closing SVB to protect deposits, naming the Federal Deposit Insurance Corporation as its receiver. The FDIC has created a separate entity where all insured SVB deposits—up to $250,000 per depositor—will be available by Monday morning.

The closure followed a tumultuous morning for SVB, when its shares were halted after falling by double digits before markets opened. That decline came on the heels of a more than 60% decline on Thursday.

The closure marks the biggest bank failure since the 2008 financial crisis and the second biggest in US history after Washington Mutual collapsed during that industry-wide downturn, according to FDIC data .

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