BOSTON–Nearly four in 10 independent business owners reported they could not pay their rent during April, marking a new high for 2023 and the third month in a row in which the rent delinquency rate among small businesses has increased, according to Alignable’s April Small Business Rent Report.
Nearly half indicated they are also having increased difficulty getting loans.
The 39% of U.S.-based small business owners who reported being behind on their rent in April compares to 38% in March, 32% in February, and just 30% in January.
“Nine percentage points is a disturbing increase from the beginning of the year, when many small business owners were more optimistic,” Alignable said. “It shows that economic pressures are intensifying each month for many.”
This data is based on an Alignable Rent Poll conducted among 4,205 randomly selected small business owners from April 1-26. Other insights came from surveys taken over the past year and a half among 75,000+ additional respondents.
The Highlights
Among the report highlights:
- 53% said their rent is now higher than it was six months ago, up from 47% in January. But 49% of landlords, often SMBs themselves, say they’re thriving as they’re able to charge what they need to cover inflation & make up for losses during COVID. That’s up from 45% in January.
- 49% of independent restaurant owners couldn’t pay April rent, 15 percentage points higher than March, which was 34%.
- 41% of small manufacturers couldn’t make rent this month, representing the highest delinquency rate this industry has seen in over a year.
- States with high rent delinquency rates in April include TX (50%) after a major surge from March, CT (46%), NJ (46%), MN (45%), NY (42%), IL (41%), OH (40%), and MI (39%).
- Other states that saw significant jumps in April rent delinquency rates include FL, CO, NC, PA, & VA.
- 48% of SMB owners polled said they are earning half or less of what they generated for income a year ago. Only 20% are growing significantly compared to 2022 so far.
- Though the overall inflation rate has cooled a bit, 75% of small business owners have felt no relief yet, noting that inflation remains high and is still cutting into their margins.
- 80% say supply costs are much higher now than they were a year ago.
- 47% of small business owners who are applying for financing said it's more difficult to get a loan now, than it was prior to the recent bank failures.
To see the complete April Small Business Rent Report, go here.
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