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8 May

Small Business Owners Struggling to Pay Rent

As a result of “cumulative pressures” of inflation, rising rates of interest, fears of a recession and bank failures, small business owners polled by Alignable are experiencing fading optimism. Those polled are seeing lower sales, profits and customer counts — leading to struggles to pay rent.

Chuck Casto, head of research, corporate communications and news at Alignable, said the present state of small business “might be summed up best with two words: economic backslide. Casto said the survey tapped 4,235 randomly chosen small business owners. He said historical responses from one other 695,000 small business owners were also included within the report.

The study found that 74 percent of respondents are concerned about rising rates of interest, while 27 percent said current rates of interest have already hurt their businesses. Alignable stated within the report that “only 34 percent of small business owners are earning as much or greater than they did prior to COVID-19, now three years after the initial impact. And that statistic has dropped 4 percentage points from 38 percent [in the January report].”

Casto said the states with the bottom recovery rates were Kentucky, Georgia, Recent York, Washington, Illinois, Texas and California. By industry, the worst recovery rates were transportation, events, gyms, the humanities, retail, restaurants, beauty salons and real estate.

“While 53 percent remain more optimistic about 2023 than 2022 (down three percentage points from 56 percent in January), pessimism has surged seven percentage points from 14 percent in January to 21 percent now,” Casto said.

Meanwhile, falling profits attributable to ongoing inflation is a top concern. Seventy-five percent of those polled said inflation continues to harm their business. And it’s not only the underside line. Forty-eight percent of respondents said they earned “half or less of the sales they generated monthly prior to COVID-19. That’s nine percentage points worse than it was in January at 37 percent,” Casto said.

Because of this, 39 percent of those polled said they couldn’t make rent, which is 9 percentage points higher than within the January survey. Moreover, 53 percent of respondents said they were paying more for rent as in comparison with six months ago.

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