Small Businesses in Crisis as Rising Numbers Unable to Pay Rent
A study by Alignable shows 43% of U.S. small business renters faced rent payment struggles in April, the highest rate since March 2021. Texas led with a 52% delinquency rate. Various sectors, including restaurants, felt the impact, highlighting economic challenges.
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A recent study by Alignable revealed that 43% of small business renters in the U.S. struggled to pay rent in full and on time in April, marking the highest delinquency rate since March 2021. Texas had the highest delinquency rate at 52%, followed by Massachusetts, California, Maryland, New York, and Washington State. Restaurant owners were the most affected, with 52% unable to pay rent, followed by those in the science and technology sector and beauty salons. Despite the U.S. economy's resilience, small businesses are facing challenges, impacting nearly half of the American workforce. Small business owners reported difficulties due to rising costs, high interest rates, and labor shortages. The Biden administration's efforts to support small businesses contrast with House Republicans' attempts to cut spending. Alignable's findings indicate that small businesses are struggling with increased rents, surging inflation, and lower revenues, with only 32% earning as much as before the pandemic. This situation poses potential economic and political implications as the country navigates through these challenges.
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6 comments>> A majority of 54 percent of small business owners surveyed by Alignable said that their landlords were charging them more now than six months ago, with 11 percent saying their rent has increased by over 20 percent.
>> According to Alignable, only 32 percent of small businesses founded before March 2020 are now earning as much every month as they were before the pandemic.
So landlords are probably rotating financing onto higher rates and trying to pass their interest charges to tenants, who haven't sufficiently increased prices to compensate.
As a small business owner, I'm very lucky to have mostly decent landlords, but I worry for the day that they sell out to REITs. Our business won't survive that.
What I haven't seen is the return of more affordable interesting local spots. We have a couple dive-y places that've hung on, but there's been very few below-average cost places that have opened. It seems unlikely but maybe someday there'll be some rebalancing, rents will go down, people will start trying to put up more down to earth accessible experiences & options.
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