(The Center Square) – Nearly half of small businesses in Massachusetts are having trouble paying their rent, a new study by Alignable shows.
Alignable, an online network company for small businesses that helps with lead generation, prospecting, offering referrals and relationships, conducted a survey with 5,321 small businesses in the United States from May 7-31.
Massachusetts saw a 21% increase in May with 42% of small businesses reporting they have trouble making rent payments in full or on time, Alignable reported. In April, just 21% reported they were struggling to pay the rent. The increase is the biggest in the nation, according to the study, ahead of New York (12%) and Georgia (10%).
“That’s a big jump that we’ll have to keep our eyes on in the coming months, but it does indicate that inflationary trends (including higher rents) are hurting Massachusetts-based small businesses and preventing them from thriving,” Chuck Casto, who serves as head of public relations for Alignable, told The Center Square.
Currently, Alignable reports, the national average of small businesses having trouble paying the rent sits at 33%. Of the surveys conducted, 29% of small businesses said they have fully recovered from the COVID-19 pandemic and are matching or surpassing monthly revenues that were earned before the pandemic.
The industries, according to the report, that are having the hardest time meeting rent requirements are restaurants (41%), beauty salons (40%), retailers (40%), travel and lodging (36%), animal hospitals and shelters (34%), and construction (34%). Falling below the national average are the automotive industry (30%), events (30%), manufacturing (24%), and massage therapists (17%).
Meanwhile, Alignable reports that 58% of Massachusetts small business owners are facing rising rent and are now paying more for rent than they were six months ago. Plus, 12% more small businesses are reporting rent increases from April, which is 6% higher than the national average.
“More small businesses in Massachusetts are struggling with higher rent than many of their peers across the country,” Casto said.
While many businesses across the country are facing higher rent, 19% in Massachusetts said they are paying anywhere between 10% and 20% more in rent, while another 15% said the rent they are paying in May is 20% higher than it was last year.
The rent crisis, according to the study, is worse among minority businesses as 56% were unable to afford their rent in May, which is a 20% increase from April. Thirty-one percent of women-owned businesses are having trouble making rent payments, while 27% of veteran-owned businesses continue to struggle.
But, as Alignable reported, only 35% of small businesses in the state have fully recovered from the pandemic, which is just 4% over the national average.