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Small businesses in various states are struggling to pay their rent, a new report shows, with rent delinquency at nearly 40 percent this month.
The findings, published Tuesday by Boston-based business tracker Alignable, are raising more than eyebrows, as they illustrate the stark effect inflation is having on everyday Americans.
The survey of 4,789 randomly selected small business owners saw more than half of respondents say their rent is at least 10 percent higher than six months ago.
If you go back seven months, the majority said their rents had increased by at least 20 percent.
Moreover, the study found that roughly 37 percent of small businesses – almost half of all Americans working in the private sector – were left unable to pay rent in October.
Compounding concerns is the fact that several states, including New York and California, are well over the already-high national average.
Offering an explanation for the phenomenon, study author Chuck Casto wrote that small business owners are steadfast, but that their incomes are ‘basically being eaten away by inflationary pressures’ as grim figures continue to rock financial markets.
Alignable discerned that one-third of businesses are at risk of closing if revenue does not ‘ramp up’ significantly in the coming months, as consumers shy away from spending amid fears of an impending recession.
As to the reasons for the short funds, poll-takers blamed higher rents, the impact of more than a year of high inflation, steeper-than-usual gas prices, increases in supply chain costs, rising labor expenses and shortages, and reduced consumer spending.
Worse, about 49 percent of restaurants were unable to pay their rent this month, up from 36, in September, while an identical 49 percent of car dealership and repair shop owners defaulted on their October rent.