Alignable’s September Rent Report is out today and rent delinquency rates among small businesses have improved significantly over August, now resting at 30% compared to a high of 40% last month.
This shift of ten percentage points is encouraging news and could mark the beginning of a shift toward a stronger recovery for small businesses – if this trend continues into the rest of Q4.
Rent Problems For Small Businesses Improve
While it’s still important to point out that 30% or nearly one-third of small businesses were unable to afford their full rent in September, this is the best rent delinquency rate for small businesses that we’ve seen since April 2022. Over the past year, the best rent delinquency rate, 26%, emerged after the holiday rush in December 2021.
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These new insights are all based on a poll conducted among 4,232 randomly selected small business owners from 9/16/22 to midnight last night – 9/29/22.
Here are other highlights from September’s Rent Report:
- Despite increased inflationary pressures, 59% of those polled say they're fighting back by charging more for their goods and services to cover their expenses, and 29% say they have fully recovered, making as much if not more than they did prior to COVID. That recovery figure, while still low, is a 6% improvement over 23% in Aug.
- While many rent delinquency rates among key industries remain high, there were some improvements. Restaurants went from 46% in Aug. to 36% in Sept., and similar patterns emerged among retailers (40% in Aug., down to 31% in Sept.), travel/lodging pros (44% in Aug., down to 28% in Sept.), and those in the transportation sector (41% in Aug., landing at 38% in Sept.). In most cases, poll takers have noted that lower gas prices have helped them pay other expenses like rent.
- However, there was little to no change for small businesses in education, or those owning gyms. Both have rent delinquency rates above 40% in Sept.
- Many states saw major improvements in rent delinquency rates including CA, CO, GA, FL, and But some rates remain high and one – with very high rents – went the other way – MA. Right now, 36% of MA-based SMBs can’t pay their rent in full and on time, up 3% from 33% last month. That represents the only increase at the state level we’ve seen this month.
- But MA is only in second place in terms of national rent delinquency. IL and NY are tied for first place with a 39% delinquency rate, again, largely because of high rent costs in both states. (See the report for more state information).
- For Canadians, the situation is more severe, with 41% of that country’s small business owners unable to make September rent, but that’s an improvement of seven percentage points over Aug. when the rate was 48%.
- In terms of provinces, AB is the highest with 50% unable to afford rent. However, only 39% in ON and 33% in BC couldn’t pay their rent, significant improvements over last month.
