While the U.S. federal government reported overall growth in the economy last week, most small business owners tell Alignable that they have not experienced it. In fact, only 12% of SMBs report feeling a surge in positive economic activity in October. And according to Alignable’s October Rent Report, released today, 40% couldn’t even afford to pay their rent in full – for the second month in a row, underscoring the ongoing financial challenges faced by small businesses.
Small business owners say the financial picture might be brighter for big business, but that’s not the case for many of them.
These insights are based on responses from 4,246 randomly selected small business owners surveyed from 10/1/23 to 10/30/23, as well as historical data from another 44,000+ polled over the past year.
Here are a few other key findings:
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The 40% rent delinquency rate is the highest it has been all year, tied with September’s rate. It’s 10 percentage points higher than it was in January.
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Several issues are driving high rent delinquency, including declining consumer spending, decreased revenues, high interest rates, increased rent prices, inflation, and businesses still trying to recover from the pandemic’s impact.
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States like Illinois (54%), Virginia (50%), Texas (49%), Massachusetts (48%), Florida (45%), and Colorado (40%) have witnessed significant rent delinquency spikes in October, with percentages at or above the already-high national average.
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Sectors including technology, manufacturing, fitness/gyms, beauty salons, and retail are experiencing substantial rent delinquency rates, with some reaching record highs.
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But there’s a silver lining: some states saw an improvement in rent delinquency, including New York, New Jersey, and Michigan.
