(The Center Square) – More than 40% of U.S. small business owners say they couldn’t pay rent on time or in full for the month of November, the highest this year.
The small business network group Alignable released the survey, which found that the hardship varies by industry. A notable 57% of beauty salons said they couldn’t make rent as well as 45% of gyms, 44% of retail and 44% of restaurants.
“Making matters worse, this occurred during a quarter when more money should be coming in and rent delinquency rates should be decreasing,” Alignable said. “But so far this quarter, the opposite has been true.”
This latest report continues a steady increase in businesses that can’t pay rent this year.
“Last month, rent delinquency rates increased seven percentage points from 30% in September to 37% in October,” Alignable said. “And now, in November, that rate is another four percentage points higher, reaching a new high across a variety of industries.”
Business owners cite a range of reasons for the difficulty making rent, including higher rent costs and lower revenue. But 60% cite inflation.
“One indicator of the toll inflation is taking on businesses is a steep drop in the percentage of small businesses that are fully recovered, earning as much if not more than they did monthly prior to COVID,” Alignable said. “The percentage was 24% in October, but dropped to 14% in November — an all-time low.”
Michigan had the highest percentage of small business owners unable to make rent at 51% with New York in second at 49% and Massachusetts third highest at 45%.
The survey queried 6,326 small business owners in November.
The Top Ten States for Rent Delinquency in November are:
- Michigan (51% of small business owners couldn’t afford rent, up 19%)
- New York (49% couldn’t make rent, up 4%)
- Massachusetts (45%, down 6% from a high of 51% in Oct.)
- Texas (43%, up 5%)
- California (41%, down 3%)
- Illinois (40%, up 8%) & Ohio (40%, up 18%)
- New Jersey (38%, down 11%)
- Georgia (36%, down 1%)
- Arizona (32%, down 2%)