Small Businesses: The Less Obvious Casualties Of Skyrocketing Rent Prices

In this uncertain economy, you probably know someone who is struggling to afford the cost of rent … or you might even be in that situation yourself. But it’s not just residential property that has seen a huge uptick in rental prices over the past several years.

Bad for business

Commercial rentals have experienced staggering inflation recently, essentially pricing out many of the most vulnerable small business owners across the nation. And with massive corporations like Amazon capable of absorbing these higher prices, it’s becoming harder than ever for entrepreneurs to remain competitive.

A new report published by the business networking organization Alignable put the reality of this trend into sharp focus.

Here are some particularly troubling statistics:

• 43% of all U.S. small businesses weren’t able to pay their April rent in full.
• More than one half of restaurant owners couldn’t afford to pay rent that month.
• Fewer than 1 in 3 small business owners are making as much as before COVID.

And with 54% of those surveyed saying rent was higher than it was just six months earlier, it’s clear that this problem isn’t one that will be resolved anytime soon.

“Very worrisome”

Not only are small businesses vital components of communities nationwide, they’re also pivotal sources of revenue for the nation as a whole. According to the Chamber of Commerce, nearly half of the country’s workers are employed by a small business, and this sector of the economy contributes a whopping 43.5% to the U.S. gross domestic product.

That’s why Alignable refused to sugar-coat its findings, describing the situation as “very worrisome.”

And things are even worse in some states. More than half of small business owners in Texas were unable to pay their full rent in April, followed closely by Massachusetts and California.

Chris Agee July 1st, 2024

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