The second wave of COVID-19 is affecting people economically, especially in the payment of rent according to a recent study.
Based on the latest Alignable Rent Poll, the ability of small businesses to pay their full rent in December continues to decline, as more COVID-related shutdowns occur.
Overall, 35% of small business owners reported that they couldn’t make rent this month (up 3% from 32% in November). And for minority-owned businesses, the struggle is even more pronounced: nearly half (49%) report being unable to cover their rent in December. That figure jumped 5% from 44% in November.
And for women-owned businesses, 35% couldn’t make rent in November and now that percentage is up to 38% in December. These findings are based on the most recent Alignable Rent Poll conducted among 9,204 small business owners from 11/21-11/23/2020.
SMBs Want Federal Rent Help.
Covering rent has been a struggle for about one-third of all small businesses since April, given the ongoing COVID issues they face.
Not surprisingly, in another survey, the Alignable SMB Funding Needs Poll, paying rent was the second-most popular answer to a question asking how they would spend more federal funding if they receive it. That poll was conducted among 7,151 small business owners from 12/5-12/7/20.
While 19% of the poll-takers answered “paying rent,” the top answer by just one percentage point was “paying my employees,” chosen by 20% of small business owners.
But when asked what additional help they’d like to receive beyond a potential new round of PPP funding, the No. 1 answer was “rent assistance” — chosen by 28% of those surveyed.
Major Issue For Many Industries In December.
Looking at different sectors, it’s clear that money is growing even tighter in many B2C industries, and paying rent is becoming increasingly more challenging.
Restaurants/bars top the list in December with 61% unable to cover their rent. (And that’s up 19% since November).
Nearly half of beauty salons (46%) had trouble paying the rent, as did 43% of travel/hospitality businesses.
High percentages of small business owners in other industries also couldn’t pay their rent in full, on time:
41% of gyms
40% of retailers
40% of massage therapists
36% of entertainers
32% of construction/home services firms.
Most noted that increasing restrictions based on COVID resurgences are causing more problems for them — and limiting the kind of revenue they can make for the rest of the year, and perhaps, beyond.
Rent Woes Across The U.S. & Canada.
While 35% of U.S.-based small businesses are unable to pay December rent, small businesses in a variety of states are even more cash-strapped.
In Canada, the rate is even higher — 37% of Canadian small business owners said they couldn’t make December rent, 1% higher than in November.