Close to half of small business owners couldn’t pay their rent in September, marking a new three-year high.
According to business networking platform Alignable’s September Revenue & Rent Report, 48% of small business renters could not make their rent payments. That was up from 41% in July and August. And it was the highest it has been since the Covid recovery era in March 2021, when 49% of small business owners were delinquent.
But among those small business owners, independent restaurants fared a bit better, with 43% reporting rent delinquency in September, the report said.
That’s actually an improvement from the 45% of restaurant owners who couldn’t pay their rent in August, though restaurant delinquencies were much lower in June (36%) and July (33%). The high for restaurant rent delinquencies so far this year was 52% in April.
The data is based on surveys of 3,482 business owners at the end of September, along with historical data of polls going back to 2020.
Rent delinquency rates for all industries dropped to the lowest in over a year in Texas (32%), and Washington saw a 14-point reduction from 45% in August to 31% in September.
The states with the lowest rates nationally were Ohio and Virginia, both at 25%. The highest delinquency rate was in Arizona (52%).
Not surprisingly, 57% of respondents said rents had gone up compared with six months ago, with 19% saying their rent had increased more than 20%.
Additionally, the report highlighted a cash crunch among small business operators, with 43% saying they only have one month or less of cash reserves—a 14 percentage point increase from August. And restaurants are among the most vulnerable small business, the report said.
The holiday season, however, is typically a busy time for restaurants. And, despite the challenges, small business owners overall expressed optimism about the fourth quarter, with 57% saying they expect growth.
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