Kevin O'Leary, chairman of O'Leary Ventures and star of "Shark Tank," is sounding the alarm on the economic policies of the Biden administration, warning that small businesses are about to face significant challenges.
Speaking on "Fox & Friends," O'Leary highlighted the impact of high interest rates and criticized the allocation of funds to large corporations while neglecting small businesses.
O'Leary pointed out that recent legislation, such as the CHIPS and Science Act and the Inflation Reduction Act, has directed money towards big companies in the S&P 500. While acknowledging the importance of these companies, which represent 40% of jobs in America, O'Leary emphasized that small businesses make up 60% of the economy and have received little support. He expressed concern over the Federal Reserve's plan to raise interest rates to 5.5% in the coming months, which will further strain small businesses.
O'Leary has been warning about a "crisis emerging" for small businesses, particularly those with five to 500 employees, which constitute a significant portion of the economy. He highlighted the challenges small business owners face in securing financing, as regional banks have tightened lending and increased interest rates.
O'Leary predicted that the number of regional banks will decrease from 4,100 to 2,000 in the next three years, leaving people wary of depositing their money in banks.
To address these issues, O'Leary suggested extending the employee retention credit for small businesses. This credit allows companies that invested in their employees during the pandemic to receive a grant. O'Leary stressed the need to prioritize support for small businesses, which provide 60% of jobs in America, rather than allocating billions of dollars to large corporations.
While the National Federation of Independent Business (NFIB) Small Business Optimism Index showed a slight increase in confidence among small businesses, O'Leary dismissed this data, stating that he interacts with small business CEOs on a daily basis and hears their concerns firsthand. He urged policymakers to pay attention to the reality faced by small businesses rather than relying solely on optimistic reports.
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