BOSTON–New records were set in May for rent delinquencies by small businesses during May, according to Alignable’s May Revenue & Rent Report.
The report is based on responses from 4,081 randomly selected small and medium-size business owners, surveyed during May.
Key Findings:
According to Alignable, key findings in the latest report include:
- Rent Delinquency Breaks New Three-Year Record. “46% of small business owners couldn't afford to pay their May rent in full and on time, up from 43% in April. This is the highest rent delinquency rate since March 2021.”
- Soaring Rent Costs. 58% of SMBs report rent increases over the past six months, a rise from 54% in April.
- Revenue Declines: 71% of pre-COVID SMBs are earning less than before the pandemic (up from 68% in April), with 46% making half or less of their previous monthly income. And 72% of newer business owners say they’re earning less than last year.
More Economic Strains
Other findings in the report include:
- Labor Costs: 70% of SMBs are paying higher wages than last year.
- Still-High Interest Rate: 52% say the current interest rate is negatively impacting their business & 46% say they’ll need the Federal Reserve to lower the rate by at least three points before recovery occurs.
- Credit Card Debt: 47% say their credit card debt is growing due to high interest rates.
- Cash Crunch: 39% say they only have one month or less of cash reserves, up five percentage points from April.
- Top Concern: 33% of SMB owners cite cumulative inflation as their primary worry: 89% report higher supply costs than last year.
State-Specific Data
By state, the findings show:
- New York: 56% of SMB owners polled couldn't pay May rent: a record high over the past year.
- Texas and Virginia: Both at 50%.
- Florida: 47%, a 10-percentage-point increase from April.
- Michigan and Pennsylvania: 46%, each up 13 percentage points month over month.
- Illinois, Massachusetts, and Washington State: 40%, up 11 percentage points for Illinois.
Sector-Specific Struggles
- Travel/Lodging: 51% unable to pay May rent, up 27 percentage points from April.
- Science/Tech & Transportation: Both sectors see 50% rent delinquency rates.
- Retail: 46% delinquency, up 12 percentage points from April.
- Restaurants: 45%, but seven percentage points down month over month.
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