Survey: Small Business Owners Reaching to Make Rent

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. Sector-specific struggles: Travel/lodging: 51% unable to pay May rent, up 27 percentage points from April. Science/tech and transportation: Both sectors see 50% rent delinquency rates.