A recent report from Alignable, an online network for small business owners across North America, indicates an ongoing small business rent crisis, as other inflationary trends continue to impair the small business economy. Rent issues abound for many sectors, including 41% of Restaurants, 40% of Beauty Salons, & 40% of Retailers. This report is based on a poll of 5,321 randomly selected small business owners.
Here are a few of the insights and to see the full report, go here:
- 33% of all U.S. small businesses (SMBs) could not pay their May rent in full and on time, up 5% from Apr. This is the highest rate of U.S. rent delinquency among SMBs this year.
- 56% of minority-owned businesses couldn’t afford May rent, up 20% from Apr. This is the highest rent delinquency rate for minority SMB owners since March 2021.
- States with the highest rent delinquency rates include MA (42%), GA (40%), NY (35%), CA (35%), MI (35%), & TX (35%). Rates increased dramatically in MA, GA, NY, TX and FL from Apr. to May.
Topping The List: Restaurants, Salons, & Retailers
Three of the industries that struggled most during the first year of the pandemic are, once again, the lead sectors 0n a list most would like to avoid, those who can't pay their rent now. More than four out of ten restaurants (41%) couldn't cover May rent, up 8% from April, and 13% from February.
In fact, they, too, have attained a new record for 2022, pushing any progress they've made back to where they were in October.
- Salons are in second place at 40%, but at least that industry has not seen an increase in delinquency from April to May.
- Rounding out the Top 3, 40% of retailers couldn't afford their full May rent, up 7% from April and 12% from February.
Other big jumps in the wrong direction, according to the report, occurred among:
- Animal Hospitals/Shelters: 34% fell short with rent payments, up 8%
- Auto Dealers & Repair Shops: 30% didn't make May rent, doubling from just 15% the month prior
- And 24% of manufacturers couldn't afford their rent, up 14% from 10%.
- However, there are some promising "silver linings" in this chart:
- Only 36% in the Travel/Lodging sector couldn't pay rent, down 5%
- Event planners made major strides, as only 30% didn't cover May rent, down 20% from 50% the month before
And massage therapists rallied, cutting their rent delinquency rate nearly in half. It's now only 17%, down 16% from 33% in Apr. Given all of the inflation-induced stress many of us feel, the massage pros taking our survey said more consumers are practicing self care, purchasing more massages.
For more details on different sectors and their rent delinquency rates, consult the chart below.
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