Rising rents are taking their toll on small-business owners nationwide, according to a new report.
More than half of small-business owners polled by the small business network Alignable reported their rent was higher in June than it was six months ago. Some noted their rents have increased by 20%.
Alignable’s June Small Business Rent Report is based on responses from 4,801 randomly selected small-business owners polled between June 5-27, along with data from 18 months of previous surveys.
Close to 40 percent of small business owners struggled to make their payments on time, tying April for the highest delinquency rate so far this year.
The latest figures follow more than a year of rising inflation and increasing interest rates that have occurred as small businesses attempt to recover losses incurred during the pandemic.
The Federal Reserve has raised interest rates from near 0 during the pandemic to around 5.25 percent in 15 months to fight inflation.
Alignable found that more than 60 percent of these businesses have yet to earn the monthly revenue they made before the onset of COVID-19. And more than half earned less than they did this time last year.
The poll also showed that minority-owned small businesses are having a tougher time than any other demographic group surveyed. These small businesses experienced a record high 58 percent delinquency rate in June — 17 percentage points higher than the rate in February.
Minority-owned small businesses reported struggling with rising interest rates and building up cash reserves, while 65 percent said their rents had increased in the last six months.
At the state level, New Jersey small businesses had the highest delinquency rate in June at 48 percent, up from 39 percent a year ago. Businesses in Florida and Georgia followed closely behind with delinquency rates at 46 and 44 percent respectively.
Yet small businesses in several states are showing signs of recovery, with some states breaking record lows. The delinquency rate in Washington fell by 22 percent from May to 13 percent. In Colorado, the rate dropped by 14 percent from the previous month.
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