(The Center Square) – A new survey shows that the small business rent crisis has reached new heights, especially in Illinois.
The small business referral network Alignable reports that about a third of small businesses in the U.S. were unable to pay rent in full and on time in May, up from 28% in April. Head researcher Chuck Casto says it is even more bleak in Illinois.
“For Illinois, that was really something else,” Casto said. “It went up 17% where 44% of those polled out of Illinois said they weren’t able to pay their rent in full and on-time.”
That is the highest percentage in the country. Texas was also at 44%, just ahead of New Jersey at 39% and Georgia at 37%.
Rising rent prices are partly to blame. Forty-eight percent of the small business owners said their rent has increased over the past few months, with 32% saying it’s over 10% higher.
“The rent is going up because the landlords are trying to recoup money they have lost and recoup the expenses that they’re spending on things like gas and groceries,” Casto said.
Another key factor hurting small businesses are gas prices, which hit record highs last month, averaging more than $5 per gallon for regular gas before dipping down slightly.
As a result, the transportation sector was the hardest hit. Sixty-three percent of transportation small businesses couldn’t afford June rent, with three-fourths citing that gas prices have had a “very significant” negative effect on their businesses.
Casto said he was surprised by the high number of small businesses in Illinois with rent problems and it merits further study.
“We’ll be looking at Illinois right off the bat in July to see if this is an extended problem or just a blip,” said Casto.
