Kevin O’Leary, the chairman of O’Leary Ventures and “Shark Tank” star is expressing concern about the impact of the Biden administration’s economic policies on small businesses. He recently shared his concerns on “Fox & Friends,” highlighting that September could bring economic turbulence due to rising interest rates.
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O’Leary expressed unease about where government funds are flowing, citing the CHIPS and Science Act and the Inflation Reduction Act, both channeling substantial sums to large corporations in the S&P 500. He emphasized that although these big companies represent a significant portion of America’s job market, around 60% of jobs come from small businesses, which have received little support. O’Leary has been a large proponent of small businesses in recent years taking up substantial stakes in companies like StartEngine, a JOBS Act platform that helps raise funds for small businesses and startups in the U.S. from retail investors. The platform has helped contribute to creating tens of thousands of jobs in the U.S., including raising over $18 million for itself in its ongoing campaign.
With the Federal Reserve raising interest rates to 5.5% in a short time, small businesses are feeling the pinch.
O’Leary has been consistent in his warnings of a looming crisis for U.S. small businesses, particularly those with five to 500 employees, which make up over 60% of the economy. He pointed out that financing is readily available for S&P 500 firms but has become increasingly challenging for small businesses, leading to soaring capital costs.
Small business owners are facing difficulties securing loans, and interest rates have surged from 4-5% to 11-17%. O’Leary predicted that the number of regional banks in the U.S. would decline from 4,100 to 2,000 over the next three years, raising concerns about bank stability.
O’Leary continues to advocate for the Employee Retention Credit, which provides financial support to small businesses that retained their employees during the pandemic. This credit is one of the few programs available to help small businesses weather these challenges. Meanwhile, large corporations are receiving $2 trillion in support, which O’Leary sees as unfair.
In response to the lack of support for small businesses, he stated, ‘What are we doing for them? Let’s wake up. Smell the roses. Realize they’re under tremendous pressure and THEY are our economy.”
Despite a small uptick in the National Federation of Independent Business (NFIB) Small Business Optimism Index, O’Leary remained skeptical, based on his conversations with small business CEOs across the country who expressed dissatisfaction with the current economic climate.
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