Newly released small business survey data shows that an alarming number of businesses are unable to pay rent.
The study found that rent delinquency varies by industry.
“Small businesses in the education sector are leading the pack, yet again, but jumping to 57 percent (up 13 percent from 44 percent last month),” Alignable said. “Not far behind, we have two more records that were broken in this study—for the automotive sector and restaurants. Both reached new rent delinquency highs, tying for second place this month at 49 percent. This is the highest rent delinquency rate either sector has experienced in 2022.”
According to the report, small businesses cited several reasons for being unable to pay rent, including higher rent costs, gas prices, recessionary fears, supply chain issues, labor costs, less consumer spending and “the cumulative, negative impact of more than a year of high inflation, which has absorbed most sales gains.”
“In fact, 59 percent of small business owners taking this poll reported that consumers are spending less this month than last,” the group said.
Retail businesses are feeling the pinch as well, and drivers for ridesharing apps are paying the price for rising gas costs.
“Some 43 percent of all retailers say they couldn’t cover their October rent in full this month, up 12 percent from last month,” Alignable said. “Beyond that, 43 percent is close to the highest rent delinquency they’ve had all year, topped only by July’s figure of 44 percent. And the transportation category is on the rent delinquency hot seat this month, too, jumping 8 percent from September, landing at a rate of 46 percent. Reduced consumer spending activity and higher than usual gas prices continue to plague drivers for Lyft, Uber, taxi companies, and the like.”
The survey data came from 4,789 randomly selected small businesses who were queried from Oct. 15 to Oct. 27 of this year. Alignable is a small business network boasting 7 million members in North America.
