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by Jeffrey McKinney
December 9, 2023
Some 61% of those firms could not pay their rent in November.
News of the Federal Reserve potentially making future rate cuts reportedly helped the stock market last month post its best month since 2022. That optimism on the nation’s central bank’s upcoming actions has transfer red investors’ attention to when interest rates will start declining from when the rates will climb to their highest mark. However, that bright outlook is not being felt many small businesses — including minority-owned firms — continuing to face obstacles like rent hikes, lower revenue generation, on-going high interest rates, and inflation.
The delinquency rate among U.S. small businesses hit a new high this year as 41% could not afford to pay their rent in full and on time in November, per this report from Alignable. The online referral network for small businesses reported the finding succeeds two straight months of a 40% rate in October and September.
Further, the news is grimmer for minority-owned businesses. Some 61% of those firms could not pay their rent in November, representing the highest delinquency rate for in a minimum of six months.
The inability for entrepreneurs to pay rent raises worries about what else entrepreneurs cannot afford as well as boost fears about how long they will be able to remain in business.
The discoveries were among those in the report tied to nearly 3,770 small business owners surveyed last month, along with input from over 48,000 other respondents during the past year.
Among the report’s top disclosures was that 55% of small businesses stated higher rent requirements now than they had six months ago. And nearly 60% of indicated they expect to make less money in this year’s fourth than they did in the same quarter last year.
Here are some actions proprietors can consider to help cover their rent based on research by BLACK ENTERPRISE:
Don’t be afraid to ask for help. Contact your landlord and explain your position. Ask them for more time to pay until you know for sure you will have the finances. Ask them if an installment payment plan and waived late fees are an option? Be sure to get whatever is agreed to in writing.
Try renegotiating your rent. This might be dauting to some small business owners when dealing with landlords. But you may have more bargaining power than you think. Be aware you’re not the only small business facing a rental payment crisis. Your landlord might be more open to rent renegotiations to retain you as a tenant. Do your homework before beginning the process to learn what the market rates are for commercial rent in your area. This could provide you with more leverage and support your case. Informing your landlord soon about financial aid headed your way could also be helpful.
Sublet unused space. Investigate the chance of renting any unused space to other businesses to help gain new revenue. Be sure to check with your landlord to see if the option is feasible and works with your rental agreement.
Cut expenses. Closely inventory all your expenses and see if any can be cut or reduced, including rent, supplies and software subscriptions for instance. No longer eat out or eliminate multiple streaming services. Be mindful that erasing nonessential expenses can help free up money to help pay rent.
Research funding options. Explore if state government along with small business offices in your city or county to see what advice, information, or links they can offer pertaining to rental aid in your circumstance. Telling your landlord that you are pursuing extra funding might work favorably in your case.
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