Report: 37 percent of small firms couldn’t pay January rent

A recent survey report finds that 37 percent of small-business owners nationally were unable to pay their January rent in full and on time, indicating ongoing economic difficulties across many industries and states. The data comes from Alignable’s monthly rent report. Compared to this time last year, when the rent-delinquency rate was seven percentage points lower at 30 percent, this year is “off to a rocky start for the U.S. small business economy,” according to Alignable, an online referral network for small businesses with about 8 million members across North America. This January’s rent-delinquency rate of 37 percent was an improvement from 41 percent in December, per the report. Alignable’s data showed that 38 percent of small-business owners in New York state were unable to pay their January rent in full and on time, up from 37 percent in December and 35 percent in January 2023. Despite recent government reports of a “sunny,” stronger economy and lower inflation rates, most small-business owners (58 percent) nationally said they have yet to feel the positive effects of cooling inflation, Alignable contends. Noting that the damage caused by inflation is cumulative for them, three out of four small U.S. firms also say that the cost of supplies is higher now than it was a year ago. This Alignable report is based on responses from 6,101 randomly selected small-business owners surveyed from Jan. 1-30, as well as input from 100,000-plus other respondents over the past two years. Other highlights from the report include the following. • New wave of rent spikes: 52 percent of U.S. small-business owners say the cost of rent has escalated significantly compared to what they had to pay six months ago, with 14 percent facing rent expenses that are more than 20 percent higher. • Revenue decline: 63 percent of small-business owners reported lower fourth-quarter earnings compared to a year prior. Among this group, 44 percent reported an earnings shortfall of 50 percent or more compared to a year earlier. • Still-high interest rates enhance suffering: 53 percent of owners of small firms say current interest rates are harming them, eroding margins, reducing consumer spending in their Main Street stores, and hindering loan payments or their ability to obtain new loans. • Labor costs rise: 54 percent of small businesses said the cost of new hires has jumped over the past year, with 11 percent noting that they’re forced to pay new hires at least 25 percent more than a year ago. Further details about the poll findings are available at: https://www.alignable.com/forum/37-of-small-businesses-cant-pay-january-rent-but-some-industries