A survey conducted by Alignable revealed that nearly 40% of small business owners were unable to pay June's rent on time. This is the second-highest rent delinquency rate of the year. The most affected sectors were:
- Education sector: 55% of small businesses struggled to make June rent (+19% compared to May).
- Manufacturing sector: 46% (+7% compared to May).
- Restaurant sector: 45% (+1% compared to May).
Alignable is an online network of small business owners, so the survey was conducted among nearly 5,000 SMB owners.
More than half of the SMBs are paying more for rent
The survey also found that more than half of SME owners (55%) are paying more money for their rent than at the beginning of the year. Sixteen percent indicated that their income rose by about 20% from January to June.
More than 60% of the owners also reported a large drop in their sales. All of them argued that their small businesses have not yet reached the level of the monthly income they had before the pandemic (2020) and 53% reported earning half or less income than they did last year at the same time.
Small entrepreneurs who are part of minority groups are the ones who suffer the most from the consequences of the economic crisis. Of these, 58% said they couldn't pay their rent in June. This reflects an increase of 17 percentage points compared to February (41%).
The most affected states and the main reason for delinquencies
Statewide, New Jersey SMBs had the highest delinquency rate at 48% in June (up from 39% in 2022). Florida is in second place in the ranking with 46% of the companies submitting their income tax payments late. Georgia ranked third with a 44% delinquency rate.
One-third of the respondents expressed that their main economic concern is inflation. Another problem frequently mentioned by small business owners (19%) is the difficulty in generating more sales:
Beyond increasing rent spikes, financial setbacks from rising interest rates and issues with cash flow, SMB owners taking Alignable's June Rent Poll specified additional financial pressure points sidelining their attempts to grow and prosper. Reflecting the growing need to generate more revenue, the money that SMBs reported earning in June is still much less than they need.
