Although a new survey reveals that nearly half of small businesses are struggling to pay rent, many are optimistic about sales in the final three months of the year.
The small business network Alignable reports that 48% of small business owners nationwide couldn’t make a full rent payment last month, which is a three-year high. The number is slightly lower at 43% in Illinois, which is the highest percentage since February.
“It was shocking to us on one level but on another level it really is indicative of what we’ve seen during the entire year,” said Alignable researcher Chuck Casto.
Texas small businesses made the biggest turnaround. About 32% said they couldn’t pay their rent last month. That is down 17% from the month before.
Transportation (58%) (including car services) and car dealers (57%), plus retailers (52%) and restaurateurs (43%) had some of the highest delinquency rates in September.
Despite the gloomy numbers, Casto said 57% of entrepreneurs anticipate some level of growth in the fourth quarter, with 30% feeling more optimistic than they did this time last year.
“The most resilient and most optimistic people are small business people and they will find a way no matter how bad things get,” said Casto.
The survey showed the Fed’s rate cut was welcome news. Twelve percent of small business owners said the ½-point rate cut will help them recover, and another 55% said they look forward to further rate cuts to give them relief.
Casto said Illinoisans can help turn the tide by shopping at mom-and-pop businesses.
“Help retailers, restaurateurs and others to have a better Q4 because they really need it now,” said Casto. “They need to see a surge in customer spending on Main Street.”
The National Retail Federation said its 2024 forecast shows winter holiday spending is expected to grow about 3% over last year.
