Alignable: 53% Of Minority-Owned SMBs Can't Pay June Rent (Up 8%)
TREND TRACKER | DATA INSIGHTS | BOSTON, MA -- June 16, 2021: Results from Alignable’s June Rent Poll have just been released, revealing that 37% of small businesses across the U.S. could not afford to pay their rent in full, on time this month. Despite many COVID restrictions loosening and more businesses reopening, many small business owners’ rent problems continue to be severe.
In fact, several states saw an increase in rent issues among small businesses, including New York (47%, up 7%), Virginia (47%, up 1%), Arizona (38%, up 12%), North Carolina (37%, up 5%), and Florida (36%, up 3%).
And for minorities, the statistics were even more alarming. Last month, 45% of minority-owned businesses couldn’t afford their rent, while in June, that number jumped eight percentage points to 53%.
This data is particularly disturbing as minority business owners throughout the COVID Era have struggled more than their peers and reported receiving less support than the general population in terms of PPP loans.
Minority-Owned SMBs: A More Stressful Recovery
Based on the findings in this week's poll, the majority of minority-owned businesses appear to be experiencing a much tougher time with their recovery now, too, as this chart clearly demonstrates.
Only 35% of the nonminorities polled couldn’t pay their rent in full, compared to the majority of minority-owned businesses (53%). The national average was 37%.
Based on Alignable's June Rent Poll conducted from 5/22/21 to 6/15/21 among of 3,814 randomly selected small business owners, several factors are contributing to mounting rent issues across the U.S.
- Inflation continues to grow, due to supply chain shortages and price hikes. And 67% of SMBs worry it will impede their recovery.
- Labor shortages abound among many businesses that desperately need help to generate the revenue required to bounce back. In fact, now 55% of SMBs say they can’t fill necessary positions, up 5% from last month.
- Confusion reigns as restrictions are lifted. Some 32% of SMBs say they’ll still require customers to wear masks in their establishments to promote a safe environment, even if their state says vaccinated people no longer need to wear them.
Beyond all of those hurdles slowing economic recovery from coast to coast, Alignable’s June Road To Recovery Report showed that 57% of small business owners only have half or less of the monthly revenue they had prior to COVID. And 48% said they’ve had trouble bringing more than half of their customers back.
Many Restaurants Still Grapple With Rent & Labor Shortages
And while restaurants have benefited from widespread reopenings, and extra support from the Restaurant Revitalization Fund, now 39% of restaurant owners polled said they can’t cover June rent. That’s not as bad as last month’s figure of 49%, but it’s still significant.
Unfortunately, restaurant owners find themselves in the middle of the labor shortage issue, so many owners tell us they can’t reach their revenue goals without the proper staff to handle an expected influx of customers. Of course, that affects their ability to pay full rent, as well.
In a related Alignable poll, 71% of restaurant owners support recent moves by half of the states withholding the extra $300 unemployment benefit, expecting those policies to help correct the labor shortages.
As you can see from this chart, several other industries that are wrestling with their recovery support withholding the extra unemployment benefit.
Beyond Restaurants: Travel, Construction & Transportation
It’s no surprise to see that the majority of small business owners in other key industries also support withholding the extra unemployment benefit, in hopes of filling open roles at their companies sooner rather than later.
As evidenced below, several of those sectors also are on our list of industries struggling the most with rent this month: construction, real estate, and retail.
Beyond coping with ongoing effects of the COVID Era, several of the industries above are hurting due to inflationary pressures, including gas prices, skyrocketing lumber costs, ongoing restrictions around people who have not been vaccinated yet, and more.
In all, a whopping 40% or more of small businesses in a wide variety of categories couldn’t pay their full June rent in full: Entertainers/Creatives (47%), Travel/Lodging (44%), Transportation (43%), Nonprofits (42%), Construction (41%), Videographers (40%), and Beauty Salons/Barber Shops (40%). Beyond 39% of restaurants that couldn’t afford their rent, 38% of real estate agents are struggling along with 35% of retailers.
Largely due to construction industry pressures and other inflationary trends, real estate agents have steadily trended upward in terms of their inability to pay rent. In April, 26% had trouble, now it’s 38%. Similarly, retailers were down to 31% in April and now have inched back up to 35%.
The rent story is a real nail-biter, especially when you consider another Alignable poll released earlier this month that shows 35% of all small businesses fear they might not make enough revenue this summer to stay afloat into the fall. And that number is even higher for retailers (40%) and restaurants (39%).
So, How Did The States Fare In June?
The states with 40% or more of their small businesses reporting that they didn’t pay June rent include:
- New York (47%), up 7%
- Virginia (47%) up 1%
- Georgia (43%), down 3%.
Other states showing that paying the rent is becoming more challenging include:
- AZ: 38%, up 13%
- NC: 37%, up 5%
- FL: 36%, up 3%
However, in these states, their rent payment rates remained the same or improved, showing more of an early recovery. The most striking statistics were uncovered in Michigan, Colorado, and Ohio.
- PA: 36% (same as May)
- CA: 36%, down 2%
- NJ: 36%, down 2%
- WA: 33%, down 1%
- MD: 32%, down 4%
- TX: 32%, down 1%
- IL: 31%, down 6%
- MI: 30%, down 17%
- OH: 26%, down 13%
- CO: 20%, down 15%
For more information on the states, specifically, or more general insights about Alignable’s June Rent Poll, please contact 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 (11-20)
Just like Political polls these are fake & not reality based.
This is addressing the constant messages I read saying people do not want to work. The are saying people are taking advantage of the unemployment, and this is why some cannot staff their businesses.
I have numerous small business clients, in many different types of small businesses. For the most part, they are operating at full staff, with business approaching, or exceeding, pre-pandemic levels. The reason for this is they are good to their people, bent over backwards to help people during all of this, and pay them fairly. Every one of them did everything they could to keep their staff, including me personally, (who is a contractor). This even when it was very difficult for their own income, and continued existence. Most have either retained, or rehired the people that have worked for them for years. They continue to make accommodations for limitations of their returned employees while they need them. I realize this may not have worked for everyone, but this shows it can. At this time in my life, these are the only type of people I will work for. These are people that realize their staff is their greatest asset, and they do what they can to preserve the relationship.
Some jobs though are hiring but at a low cost. My friend was making over 20 an hour before the pandemic. Now he can’t get a job probably because they’re not gonna pay what he was earning and he has been on various interviews with no prevail yet, but they want to cut everything. I see more trouble coming now than before it started.
Not everyone pays the rent first … or use finance correctly. This doesn’t mean that there is a racial issue. Just means there is a financial system issue. Giving money to people and they blow it on beer, smokes, or drugs, etc doesn’t have any thing to do with the lack of work or workers.
Cost of goods and services and increase rent or housing affects all people regardless of gender or race. I just pay my means to survive bills first and don’t have much else.
Since March of 2020, a lot in the world has changed.
While there is some level of normalcy now, businesses are trying to make sure they are never in the same position as they were in 2020. And the end of the lock down creates a struggle to bring back past clients that have gotten used to staying away... Many have been forgotten.
But there is something that businesses that survived the pandemic lock downs didn’t that helped them stay “open for business” and even grow while others couldn’t.
What is it that they didn’t do?
They didn’t ignore the #1 source of additional revenue they had: their current and past clients’ lists!
They were able to pivot the way they were doing business by letting their current and past buyers know that they were still “open for business”…but in a different way!
Simple, right?
Reaching out to your current and past clients allows you to stop chasing the next client and serve your current clients WAY better.
If you have a list of current and past clients but you haven’t used it to increase your revenues yet, now is the time to reach out to them so you can get a lot more sales and fast cash in 7 to 14 business days.
We have already figured out how you can leverage your clients’ list to generate lots of additional revenue…fast. Would be happy to discuss if you'd like me to show you how.
It's always interesting to see statistics but the "WHY" of the statistics is what is most important, in my mind. We look to the impact the Biden administration is having (ie paying people to stay home) which is leading to employee shortages which is harming small businesses of all kinds and we can look at the impact the pandemic has had (and is having) on supplier shortages.
I am glad to see that nonprofits areare represented in this report. As a minority, not-for-profit Executive Director, I appreciate the author's diligence and inclusivity in this matter. We are a volunteer-based organization, including me. We have no paid staff. However, we do have two contractors that assist with our offsite programs, but we were not eligible for the PPP or any stimulus-based support because we use volunteers. Our grants, however, are reimbursement-based only cover project-based initiatives with no overhead.
Great job!
It's time to help small business survive! When a small business gets the sales volumes, there's a better chance the employees will reap more benefits and increase in pay. Support your local shops and vendors. Amazon, Walmart are not hurting but your local small businesses are.
I am aligned, it is beyond the restaurants. The world does not just focus on eating out; especially, if you cook at home anyway!
That's true Rebecca. Just have to do more research.In the mean time try workingxon "Plan B" Like a work from home program.
. Many individuals have found same, making good income working from home. Bills are being paid, not having to deal with the politics of the corporate world. No more long commute to work.
. That's less stress;more peace of mind. You are able to rest better at 🌙nights.
Bidenomics doesn't work for anyone.