Image Credit: Tony Webster / CC
The Center Square [By Casey Harper] –
Newly released small business survey data shows that an alarming number of businesses are unable to pay rent.
Alignable released its monthly small business report for October which showed 37% of American small business owners were unable to pay rent on time or in full last month. That is up from 30% who said the same the month before.
The study found that rent delinquency varies by industry.
“Small businesses in the education sector are leading the pack, yet again, but jumping to 57% (up 13% from 44% last month),” Alignable said. “Not far behind, we have two more records that were broken in this study — for the automotive sector and restaurants. Both reached new rent delinquency highs, tying for second place this month at 49%. This is the highest rent delinquency rate either sector has experienced in 2022.”
According to the report, small businesses cited several reasons for being unable to pay rent, including higher rent costs, gas prices, recessionary fears, supply chain issues, labor costs, less consumer spending and “the cumulative, negative impact of more than a year of high inflation, which has absorbed most sales gains.”
“In fact, 59% of small business owners taking this poll reported that consumers are spending less this month than last,” the group said.
Retail businesses are feeling the pinch as well, and drivers for ridesharing apps are paying the price for rising gas costs.
“Some 43% of all retailers say they couldn’t cover their October rent in full this month, up 12% from last month,” Alignable said. “Beyond that, 43% is close to the highest rent delinquency they’ve had all year, topped only by July’s figure of 44%. And the transportation category is on the rent delinquency hot seat this month, too, jumping 8% from September, landing at a rate of 46%. Reduced consumer spending activity and higher than usual gas prices continue to plague drivers for Lyft, Uber, taxi companies, and the like.”
The survey data came from 4,789 randomly selected small businesses who were queried from Oct. 15 to Oct. 27 of this year. Alignable is a small business network boasting 7 million members in North America.
About the Author: Casey Harper, The Center Square D.C. Bureau Reporter – charper@centersquare.com ~ Harper is a Senior Reporter for the Washington, D.C. Bureau. He previously worked for The Daily Caller, The Hill, and Sinclair Broadcast Group. A graduate of Hillsdale College, Casey’s work has also appeared in Fox News, Fox Business, and USA Today.
