Over a third of all small businesses in the United States failed to pay rent in October. This comes from small business referral network company Alignable, which releases a monthly report on the state of small businesses in America.
According to its latest report, 37 percent of American small business owners were unable to pay rent on time or in full in October. This is up from 30 percent of small business owners who said the same in September. This is also the highest percentage of rent delinquency among small business owners this year. (Related: 63% of small businesses are now on hiring freeze, 10% laying off employees.)
The survey was conducted between Oct. 15 to 27 and involved 4,789 small business owners all over the country. More than half of those surveyed said their rent has risen by at least 10 percent than it was six months ago, and one in seven said rents have increased by at least 20 percent.
Chuck Casto, Alignable's head of research, noted that the incomes of small business owners are "basically being eaten away by inflationary pressures."
Small business owners in a variety of industries feeling the pinch of inflation
Rising rent alone is already difficult enough for small business owners to deal with. But with rising costs for other concerns, they need to make tough decisions about where to spend their earnings.
Along with rent, small businesses were also dealing with higher gas prices, fears of recession, unresolved supply chain issues, higher labor costs, less consumer spending and the cumulative, negative impact of more than a year of high inflation – which has absorbed most sales gains.
Small businesses in the education sector are leading the pack in rent delinquency – a title they also had in September's survey, according to Alignable. Fifty-seven percent of small businesses in education were unable to pay rent on time or in full in October, up by 13 percent from 44 percent last month.
According to Alignable's report, 43 percent of all retailers couldn't cover their October rent in full this month, up by 12 percent from September. This percentage is also only one point away from the highest rate of rent delinquency among retail businesses, topped only by July's figure of 44 percent.
Transportation businesses are also in hot water. According to the survey, 46 percent of transport businesses became rent delinquents in October, jumping by eight percent from September.
"Reduced consumer spending activity and higher than usual gas prices continue to plague drivers for Lyft, Uber, taxi companies and the like," stated the report.
In real estate, 37 percent of real estate agents were having trouble paying rent, up by 10 percent from last month. Alexandre Tanzi, writing for Bloomberg, noted that this reflects the "fallout from a slowdown in home sales as higher mortgage rates chill the housing market."
Small businesses in the automotive sector and the food industry are also struggling. In both industries, 49 percent of them were late with rent or unable to pay in full. This is the highest rate of rent delinquency either sector has experienced in 2022.
In the automobile industry, small business owners who run car repair shops and auto dealerships are having to pay more for parts their customers need to fix their vehicles. Rising costs and car prices are also making it difficult for dealerships to sell cars.
Alignable warned that around one-third of all small businesses in America are at risk of closing if their revenues do not "ramp up" in the coming months.
Learn more about the state of the U.S. economy at MarketCrash.news.
Watch this short clip from Newsmax discussing how President Joe Biden's policies are hurting small businesses.
This video is from the channel NewsClips on Brighteon.com.
More related stories:
Survey: 63% of small business owners no longer hiring because they cannot afford added costs.
Census Bureau: 3.8 Million renters likely to be evicted in the next 2 months.
THANKS, BIDEN: Small businesses struggle as highest inflation in decades wrecks US economy.
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