Survey: Small Business Owners Reaching to Make Rent

By: M. Scott Morris | 3,643 Reads | 6 Shares

U.S.-based small businesses are facing increasing financial challenges with May 2024 setting new records for rent delinquency and highlighting persistent economic woes. That's according to Alignable's May Revenue & Rent Report, based on responses from 4,081 randomly selected SMB owners surveyed during May plus historical data.

Key Findings:

Rent delinquency breaks new three-year record: 46% of small business owners couldn't afford to pay their May rent in full and on time, up from 43% in April. This is the highest rent delinquency rate since March 2021.
Soaring rent costs: 58% of SMBs report rent increases over the past six months, a rise from 54% in April.
Revenue declines: 71% of pre-COVID SMBs are earning less than before the pandemic (up from 68% in April), with 46% making half or less of their previous monthly income. And 72% of newer business owners say they're earning less than last year.
Labor costs: 70% of SMBs are paying higher wages than last year.
Interest rate: 52% say the current interest rate is negatively impacting their business, and 46% say they'll need the Federal Reserve to lower the rate by at least three points before recovery occurs.
Credit card debt: 47% say their credit card debt is growing due to high interest rates.
Cash crunch: 39% say they only have one month or less of cash reserves, up five percentage points from April.
Top concern: 33% of SMB owners cite cumulative inflation as their primary worry; 89% report higher supply costs than last year.

State-specific data:

New York: 56% of SMB owners polled couldn't pay May rent—a record high over the past year.
Texas and Virginia: Both at 50%.
Florida: 47%, a 10-percentage-point increase from April.
Michigan and Pennsylvania: 46%, each up 13 percentage points month over month.
Illinois, Massachusetts, and Washington State: 40%, up 11 percentage points for Illinois.