Report: 41% of small companies unable to pay lease this month

Casey Harper (Center Square)

More than 40% of U.S. small business owners said they were unable to pay November rent on time or in full, the highest level this year.

Small Business Networking Group Alignable The published survey found that difficulties vary by industry. Notably, 57% of beauty salons said they were unable to pay their rent, along with 45% of gyms, 44% of retail stores and 44% of restaurants.

related: How to prepare for disaster as Amazon founder Bezos issues dire warning for economy

“Worse, this is happening in a quarter when there should be more money coming in and rent delinquencies should be falling,” Alignable said. “But so far this quarter, it’s been the opposite.”

This latest report continues this year’s steady increase in businesses unable to pay their rent.

“Last month, the rent delinquency rate rose 7 percentage points to 37% in October from 30% in September,” Alignable said. “And now, in November, it’s four percentage points higher, hitting new highs across multiple industries.”

Business owners cited a range of reasons for struggling to pay rent, including higher rental costs and lower incomes. But 60% mentioned inflation.

related: Biden student loan deferrals would cost taxpayers $40 billion, group says

“One indicator that toll inflation is impacting businesses is the sharp decline in the percentage of fully recovered small businesses with as much, if not more, monthly revenue than they had pre-COVID,” Alignable said. “It was 24% in October, but fell to 14% in November – a record low.”

Michigan had the highest percentage of small business owners unable to pay rent at 51%, followed by New York at 49% and Massachusetts at 45%.

The survey asked 6,326 small business owners in November.

Syndicated with permission from The Center Square.

related: EPA to spend $13 billion on ‘environmental justice’ and climate

related: Losing Retirement: Why 401(k)s Don’t Work (And Not Just Because of the Bad Economy)