Silicon Valley Bank is a lender to venture capitalists, technology entrepreneurs, and start-ups.
The bank has been suffering from several years of losses and has had to write off hundreds of millions of dollars in loans.
The bank handled over $55 billion of venture-capital fundraising, from start-ups including Uber, Roku and Moderna.
Bloomberg reported last week that the bank had hired external advisers to consider a possible sale of its UK assets, which are not only its largest operations outside the US but also its second big office after San Francisco.
The growing losses led to the departure of its CEO in September 2020.
News of Silicon Valley Bank's problems comes at a time when American economic growth is fragile.
The Covid-19 pandemic has increased the government's reliance on borrowing, and interest rates have reached historic lows.
While businesses that rely on lending the way Silicon Valley Bank does tend to benefit when interest rates are low, the bank has not been able to prevent losses.
The New York Times reports that "the tech-lending ecosystem went from an oasis in finance to a disaster", and some experts believe "the bank's collapse could set back a generation of innovative start-ups that rely on its loans".
From the sources cited, it is clear that the US economy is in for a rough ride without lenders such as Silicon Valley Bank.