Alignable: 52% Of Minority-Owned SMBs Can't Afford July Rent
Alignable’s July Rent Poll showed that many industries and groups are still coping with the lasting effects of the COVID era, while others are bouncing back more quickly.
Alignable polled 5,911 small business owners from 7/2/21 to 7/23/21 and learned that the majority of minority-owned businesses (52%) still could not pay their rent in July.
That figure is much higher than the U.S. national average (35%) and the Canadian average (43%), both of which include all demographic groups and industries.
Women Face Ongoing Issues; Veterans Are On An Upswing
More than one-third of women-owned businesses (37%) also did not pay full rent on time in July, whereas fewer male-owned and veteran-owned businesses struggled.
In fact, compared to June, the veteran-owned businesses saw a 15 percentage point increase in the number of owners who could pay their full rent. So that’s a silver lining in this report.
Unfortunately, in comparison to June, the same percentage of women-owned small businesses paid rent in July compared to June.
Only 1% more of the minority-owned businesses could pay their rent this month. And only 2% more of all small businesses could cover July rent in full and on time.
Those increases represent glimmers of hope, but are not all that significant, especially given that 33% of all business owners tell us they're fully recovered at this point and many others have had revenue gains, according to our July Road To Recovery Report.
Rent Troubles Continue For Restaurants, Retailers & Others
Sectors that continue to struggle to pay monthly rent include: nonprofits (64%), entertainers/artists (50%), transportation (48%), event planners (43%), restaurants (40%), beauty salons (39%), gyms/fitness centers (38%), retailers (37%), construction (37%), and travel (28%).
Comparing these industries to our figures from June shows more ups and downs. The good news is that more small businesses in a few industries demonstrated that they could pay their rent this month than in June.
These industries where the ability to pay rent increased included travel (up 14%), event planning (up 7%), construction (up 4%) and beauty salons (up 1%).
However, looking at our chart from June below, you can see that a higher percentage of small businesses in other industries are having more trouble paying their rent. An additional 22% of nonprofits couldn’t pay their rent (jumping from 42% to 64%), largely because they report that donations to many charities are down.
Times are tougher for transportation companies, including individual Uber or Lyft drivers, as 48% this month couldn’t pay rent vs. just 43% in June. Other industries showed increased trouble affording rent, such as entertainers/artists (up 3%), retailers (up 2%), and restaurants (up 1%).
What About The States and Provinces?
Here’s how the situation looks for regional and local stories.
As mentioned above, in the U.S., 35% couldn’t pay rent in July. In Canada, 43% of all small businesses were in the same boat.
States with the highest percentages of small businesses unable to pay full rent include GA (46%), NY (41%), MA (41%), and MD (37%).
In direct contrast, states with the lowest percentages of rent problems were TN (18%), WA (18%), MO (22%), OR (22%), AZ (24%), VA (25%), CO (26%), and FL (27%). (Those figures show another silver lining).
Here are the percentages of small businesses in other states that weren’t able to pay July rent. Many of these figures are still high, though, in past reports, some of these states were in worse shape.
- CA: 35%
- CT: 34%
- IL: 35%
- MI: 34%
- NC: 34%
- NJ: 34%
- OH: 31%
- PA: 32%
- SC: 34%
- TX: 32%
- WI: 30%
In Canada, several big regions showed that over 40% of their small businesses still couldn’t handle paying their full rent on time in July: ON (46%), BC (42%), and AB (41%).
For more information about the states or provinces, or additional statistics related to Alignable’s July Rent Poll, please reach out to me at chuck@alignable.com.
To see other polls we’ve conducted since March 2020, please go to the Alignable Research Center.
ABOUT THE ALIGNABLE RESEARCH CENTER
Alignable is the largest online referral network for small businesses with over 6.5 million members across North America.
We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.
Comments (1-10)
Minority owned businesses don’t have any other issues that non-minority owned businesses have. We all have the same issues.
Please do not look at us as victims. Many minorities just don't have the skills to run small businesses and lack education on finances. It's not a disparity because of the shade of our skin. Many just need people to give it to them straight point them to resources that will actually help them and help them close doors if they need to. Too many in the community start businesses they never could handle I know for a fact that's a problem in the African American community.
Thank you for bringing this to the frontline. It is truly sad to grasp what has happened so quickly to so many hardworking people. These businesses are the backbone to the communities we live in. We must preserve all of the businesses that we can to preserve a quality local life.
Look at spending more on marketing. Be aggressive during the down and slow times. If you don’t have a budget for marketing. Get social. Go out and meet in other biz social settings. Get on line. Join more groups on line. Grow your network when times are slow.
Well, I for one don't care what color of the rainbow you are, or what you decide you are going to be - so - I offer my liquidation services to anyone who puts any of those colors in front of their business - because most if not all of them are going belly up because they lose focus of the reason they are there. To be in business.
And from a landlord perspective... The banks are no longer giving help and neither are the utility companies. Therefore you have the trickle down effect and there's no help for landlords at this time. Except we are not allowed to evict on the residential side with no reprieve and yet there are help wanted signs up all over the place!
If anyone is having difficulty covering expenses and is willing to pivot into solution mode, I may be able to help. I pivoted also and have discovered new ways of working that work well with my schedule. I've been able to keep my dance studio of 11 years open and cover the bills.
WE ARE ALL STRUGGLING! I am looking for a job to supplement my work. People need to get out and work at whatever job. Small business are in bad shape right now. So put them on the back burner, cut your losses if you are not working from home and go to work!! I have to remortgage my house. Put on a mask. Get one that suits you especially.
While I truly hate to see people in dire straights, does anybody care about the landlords who may also have mortgage payments that come due but they can't evict people who could possibly be making enough to pay rent? Every situation is different, but I think the landlords should also get consideration
Keeping up with the trends of your industry are vital. In the Beauty and wellness industry I have learned to pivot and add relevant products and services to my menu to make up for slow times.
Hair stylist have to be pivot in summer months when the weather and outdoor activities cause women to go to alternative styles even wigs. As a Hair Stylist if you don't find a way to capitalize on these trends you leave a ton of money on the table.
Massage clients want pain creams and mechanical massage tools, heat pads and more.
Partner/ Joint venture with other business owners to get access to their client base and split the profits. You have to put your thinking caps on and find a way to get through this. I hope this helps someone!