Barbara Corcoran, Founder of The Corcoran Group and Shark on ABC’s “Shark Tank” joins Yahoo Finance’s Zack Guzman to discuss economic and COVID-19 concerns as small businesses struggle for survival amid a looming election.
ZACK GUZMAN: I actually want to focus in on what we're seeing move the markets here today, folks, because it is quite astonishing when we see the case count continue to rise across the pond in Europe, but also back here in the US, as we see hospitalizations in New Jersey top 1,000 for the first time since we saw that earlier back in the summer. Obviously, this is impacting small businesses in terms of their expectations on potential reclosures here. We're already seeing that play out in Chicago.
For more on that, I want to get to our first guest, Shark Tank's Barbara Corcoran. You know her well. And Barbara, I appreciate you coming back on to chat with us today. At first, I mean, when we talked about this all hitting back earlier in the year when we saw cases rising and lockdowns hitting, you said a lot of your small businesses that you worked with were in very real danger of closing. As we're seeing cases tick back up now, what are you hearing from business owners worried about that playing out again here in the US?
BARBARA CORCORAN: It's gone way beyond just worrying about it and talking about it. One in five businesses that I've invested in have closed. And I would say that another two out of five are probably near death, so to speak. Because small businesses really have been at the losing end of COVID-19, while if you really watched the large public companies, certainly we have some that grab headlines along the way.
So if Hertz goes down or JC Penney goes down, everybody's talking about it. But nobody's talking about the one in five businesses that have closed for good since January. It's really a totally uneven, unfair market. And I don't think people have their eye on those small businesses and the damage it's going to do to the economic recovery.
ZACK GUZMAN: I mean, when we talked about that, too, in the lockdown, obviously, it's not just the small businesses here that would be worrying, but also the employees working at a lot of these institutions that would have to close down again without additional support. As we know, since the end of July, the CARES Act support there has waned or completely rolled off, as have PPP funds here. So what are you seeing play out on that front, as more businesses try and figure out the process to deal with getting these loans turned into grants?
BARBARA CORCORAN: Well, the money from the PPP and any program that has been gotten has largely been spent. And as you know, the number one cause why businesses go down in any market, never mind a kind of market they've been coming through like a bloodbath, is certainly cash flow. So the cash flow is putting these people out of business. It's not desire to stay in business.
And when you think that they employ four out of 10 employees, every time they have a cash flow problem, there are less jobs for those people. And when you see who's really applying for those small business loans, it's a small business. But more importantly, people who are applying for unemployment insurance are largely those people let off by small businesses with less than 100 employees. And that trend will continue unless something changes.
There's really a great need for help while Congress just debates it forever, and no help really comes forward. It's a dire situation, and I don't think people, again, are taking seriously.
ZACK GUZMAN: Yeah, and a lot of people do say that that's expected to stay the course. I mean, we heard back and forth on the negotiation front between Republicans and Democrats here. Basically now that we're so close to the election, the idea that anything's going to come through, completely off the table. That happened a few days ago in terms of hopes completely dying on that stimulus front.
But in terms of the election, how do you see that playing out, whether President Trump is re-elected, whether or not Joe Biden wins, how that might change the conversation around what stimulus is needed, or rather, what gets passed and how it might shake out on the business front?
BARBARA CORCORAN: Well, largely, whether Trump or Biden is elected, everybody is going to be helped, simply because it removes the uncertainty card. Uncertainty in any business climate does more damage than the most terrible news in the whole world. And so I think people will adjust to whoever the president-- the new president or the old president's going to be. Because at least it's behind everybody.
But I can say that most people who are wealthy are hoping and praying that Trump gets elected because he forwards the large business interests religiously and faithfully, whereas Biden is making the claims, although it's just theory yet-- of course, you have to pass it through the houses, et cetera. That's no easy feat.
But Biden is more small business friendly. And many of the programs that he's proposing-- whether they really happen or not, we don't know-- are much more friendly towards small business. But you know what? It's details that are yet to be seen. What is going to help everybody is certainty after the election. I believe it's going to be a sigh of relief, like got that behind us. And every small business will feel like they're a little bit more in control, and they can decide what they're going to do.
But I have to tell you, most of them won't have a decision to be made. Either they could afford next month's rent, pay their employees next month, or they're going down like many of the other people on the block have already gone down.