Small Business In Transportation Sector Couldn’t Pay February Rent
The situation is especially challenging for a few industries, with transportation (car and limo services, taxis, and trucking companies) topping that list. In February, 53% of SMBs in the transportation sector couldn’t pay their rent, up 16 percentage points from January.
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Construction firms are now at a rent delinquency rate of 43% (up 13% over last month), restaurants are at 40% (up 2%), and the automotive industry is at 39% (up 23% over Jan.).
Some states are also experiencing heightened rent delinquency. Michigan leads the way with a rate of 44% (up 5%). Georgia is next at 40% (up 2%), and New York is at 37% (up 2%), while NJ (34%), TX (33%) and AZ (27%) also saw jumps in small business rent problems.
These latest developments are fueled by rent spikes, the scarcity of cars & car parts, rising interest rates, a jump in U.S. inflation, and revenue concerns.
Some 31% of SMBs have only one month or less of cash reserves, up five percentage points from January. And among pre-COVID businesses, only 33% are achieving the same monthly revenues they generated prior to the pandemic, down five percentage points from 38% last month.
These findings are based on responses from 3,875 randomly selected small business owners polled from 2/4/23 to 2/27/23, along with past research surveying 70,000+ other small business owners over the past 14 months.
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