Small Business Rent Delinquencies Decline
By: M. Scott Morris
Published: December 16th, 2024
Alignable’s November Revenue & Rent Report reveals a mix of progress and challenges for small businesses as the year comes to an end. The report is based on responses from 7,780 randomly selected small business owners surveyed from Nov. 11-30 along with more than 80,000 historical responses.
- Rent delinquency declines. Rent struggles eased for many with the delinquency rate falling to 37%, its lowest since January. This trend is especially notable in states like Massachusetts and North Carolina, which reported significant progress.
- Optimism on the rise. More than half (53%) of small business owners report feeling optimistic about the economy, marking the highest level in over a year. Many attribute this optimism to the results of the November U.S. elections, which they hope will foster economic stability.
- Revenue and cash flow improvements. November saw 34% of SMBs reporting higher earnings compared to last year, up from 25% in September. Additionally, the percentage of business owners with just a month or less of cash reserves dropped to 29%, a dramatic improvement from 43% in September.
However, some major challenges persist:
- Retailers and restaurateurs face headwinds. Despite holiday shopping, retail rent delinquency climbed to 45% while restaurants hit a year-long high of 46%, citing rising operating costs and limited cash flow.
- Challenges increase in some states. Illinois and Michigan saw rent delinquency spikes with rates rising as high as 48%. Meanwhile, hurricane-related challenges have caused setbacks for SMBs in Florida.
This report underscores the urgency of supporting local businesses. While large online retailers dominate consumer spending, Main Street merchants are vital to communities, contributing to local tax bases and services. Without support, the risk of empty storefronts increases.
To see the full report, click here.
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