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6 Nov

SMBs Are Struggling to Pay Rent within the U.S.

Based on latest survey findings from Alignable, the Boston-based small business referral network with over 7 million members, small business owners’ ability to pay rent on time took a 7 percent dive in only one month, reaching 37 percent of U.S. small business owners in October.

Chuck Casto, head of stories and research at Alignable, said that is the most important and most rapid increase in 2022. Furthermore, in September, rent delinquency had reached a six-month low, which was coupled with an optimistic outlook for earning potential as many small business owners reported increased sales.

In its survey of nearly 5,000 small business owners, Alignable revealed reasons for higher rent delinquency coincided with higher rents for 51 percent of SMBs. Moreover, survey respondents cited “the cumulative, negative impact of greater than a yr of high inflation, which has absorbed most sales gains,” recessionary fears, steeper-than-usual gas prices, ongoing increases in supply chain costs and rising labor expenses and shortages.

At the identical time, 59 percent of SMB owners told the corporate they’re experiencing consumers spending less.

Notably, while the findings of the report are discouraging, Casto said the situation is “much more daunting in Canada, where 42 percent of small business owners said they couldn’t make October rent, up 1 percent from September.”

Rent delinquency by state.

Courtesy of Alignable.

Alignable’s survey found that industries experiencing the very best rates of rent delinquency include educators, automobile dealers, restaurants and retail. In comparison with the national average of 37 percent, 43 percent of small business owners within the retail industry reported rent delinquency, in comparison with 39 percent inside the beauty industry. Education businesses were the very best at 57 percent, followed by automotive and restaurants at 49 percent rent delinquency.

All eyes are on retail without delay and people eyes aren’t exactly smiling, especially in the case of rent delinquency,” said Casto. “Some 43 percent of all retailers say they couldn’t cover their October rent in full this month, up 12 percent from last month. Beyond that, 43 percent is near the very best rent delinquency they’ve had all yr, topped only by July’s figure of 44 percent.”

Two industries that saw slight improvement (just 1 percent higher than in September) are gyms, right down to 41 percent from 42 percent in September. Similarly, the October rent delinquency rate for musicians and artists was down 37 percent from 38 percent in September.

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