(The Center Square) – About one-third of Iowa-based small- and medium-sized businesses couldn’t pay their rent in full on time in May, matching the national average, according to a new study from Alignable.
However, Iowa’s May rate increased 8 percentage points over its April rate while the U.S. rate in May was a 5 percentage point increase over the prior month, the online network company for small businesses found. The company surveyed 5,321 small businesses in the United States in May.
“The higher than average rate of increase for IA stands out as a potential red flag, as inflation woes continue to overwhelm many small businesses in Iowa,” Chuck Casto, who serves as head of public relations for Alignable, told The Center Square.
Casto said 53% of Iowa-based small business owners reported they’re concerned that inflation could force them to shut down within the next six months if inflation continues to get worse instead of improving.
“The national average for that question was 51%, so Iowans are just a bit more concerned than others in the nation, but those numbers are, quite frankly, worrisome,” he said.
Casto said half of Iowa-based small- to medium-sized businesses reported in May and April that they’re paying 10% to 20% more for rent currently than they had six months ago, compared with a national average of 52% for May and 46% for April.
Twenty-two percent of the Iowa-based businesses surveyed reported they have matched or exceeded monthly revenues they earned before the pandemic. Nationally, 33% percent of businesses surveyed reported this full recovery.
Iowa businesses’ May reports were 11 percentage points less than the April reports.
Casto attributed the decrease to the impact of inflation on the businesses.
“Local and federal politicians will really need to do something to help reduce inflation and give these suffering small businesses the chance to at least try to recover fully,” Casto said.