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Business People Are Still Struggling to Pay Rent Despite Slight Economic Comeback

-Editorial

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. 

Considering that the U.S. eviction moratorium is set to expire on July 31st, worries are escalating about what will happen to these rent-stressed businesses based in the U.S. 

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. 

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 the 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%).

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