(The Center Square) – Minnesota has the third-highest small business rent delinquency rate, according to a new report.
Alignable.com, a referral network for small businesses in North America that has more than 8 million members, released the state-by-state report this week. The network surveyed 4,424 randomly selected small businesses from May 6 to 30.
According to the report, 47% of 153 Minnesota-based small businesses were delinquent on rent in May, up from 45% in April. Only New York and Illinois had higher delinquency rates in May. Those states’ rates are 48% and 52%, respectively. Nationally, the average delinquency rate was 37%.
Minnesota’s May delinquency rate is the highest rate for the state in more than a year, the report said. April’s rate was 45%, which was the same in March, up from 29% in February and 8% in January. From May to December 2022, the delinquency rate ranged from 27% to 35%.
Head of Research and News Chuck Casto told The Center Square that part of the problem for Minnesota small business owners is that 62% of them, compared with 54% nationally, said they have to pay more for rent now compared with six months ago. Thirteen percent, compared with 14% nationally, said their rent is at least 20% higher now compared with December 2022.
Four of five Minnesota business owners said in a response to the question “If we were to officially enter a time of recession, how concerned are you that your business will suffer?” that they were concerned. One-third of those who said they were concerned said they were “highly concerned,” believing they’re already in a recession and their businesses are suffering because of it. Among the 34% who are highly concerned, 12% said they’re afraid that if conditions don’t improve soon, they may have to shut down their businesses. Nationally, two-thirds of small business owners are concerned, and 27% of those concerned said they’re highly concerned. Among the 27%, 4% are worried they may need to close up shop. Only 15% of Minnesota business owners, compared with 32% nationally, said they’re making at least as much money monthly as they did before the pandemic.
Fifty-seven percent of minority small business owners, nationally, couldn’t pay rent in May, up from 48% in April.
Fifty-three percent of Canadian small businesses polled were delinquent on rent in May.