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53% Of Minority-Owned SMBs Can’t Afford April Rent

By Anna Peel. Originally published at ValueWalk.

minority-owned smbs

53% Of Minority-Owned SMBs Can’t Afford April Rent, Despite Early Signs Of Recovery


Q1 2021 hedge fund letters, conferences and more

Minority-Owned SMBs Can Not Afford April Rent

Boston, MA, April 15, 2021: Many small business people are feeling better about their prospects as expedited vaccine distribution is taking effect across the U.S. But that doesn’t mean the money is rolling in yet. And for minority-owned small businesses, the rent situation continues to be very difficult.

Alignable’s April Rent Poll, conducted among 8,943 small businesses from 3/27 to 4/5/21, showed that covering the rent remains a major obstacle for nearly one-third (31%) of all small business owners in the U.S. But for minorities, that percentage is much higher: 53% of minority-owned SMBs could not afford to pay their full rent on time. 

And as this chart indicates, their situation is more dire than the struggles of other demographic groups.

minority-owned smbs

While 53% is better than last month’s number, 67%, it’s still very discouraging and suggests that the recovery for many minority-owned businesses will likely be slower and more difficult.

Unfortunately, this reflects a trend we’ve seen throughout the COVID Era that doesn’t seem to be going away.

And the fact that more than half of minority-owned businesses can’t pay their rent also indicates that the PPP program is not fulfilling its early promises to focus on helping minorities, at least so far. Much more needs to be done for minority-owned small businesses to help them to rebound.

Small Business Economy’s “Glimmer Of Hope”

Despite the ongoing challenges that minority small businesses face paying their rent, there is a glimmer of hope for the overall small business economy.

That’s abundantly clear when we compare the 31% average from this month to March’s figure: 49%. So dropping 18% to 31% is a welcome reversal in the worrisome upward trend that lasted from January to March.

And much of this can be attributed to increased hope of a new normal ushered in by faster vaccine distribution.

Along with that general trend reversing, we did see some improvement in several industries, too.

Rent Rebound For Restaurants, Retail, Gyms & Salons?

Look at the latest chart for April and compare it to our statistics from just one month ago.

Rent Rebound

Some industries show dramatic improvement, including restaurants, retail, travel/hotels and even beauty salons. Here’s March’s industry chart, as a stark contrast.

Rent Rebound

While the rent issue for event planners has remained the same over the past two months, with 54% unable to pay their rent, that’s largely because most event venues are still shut down or significantly restricted.

However, with more restrictions lifted in other industries, as well as more reopenings, you can see the following month over month improvements:

  • Restaurants/Bars: 63% down to 35% — a difference of 28%.
  • Gyms: 53% down to 30% — a decline of 23%
  • Retailers: 50% down to 31% — a drop of 19%
  • Beauty Salons: 59% to 40% — a decrease of 19%
  • Massage Therapists went from 56% to 46%
  • Travel/Hotels: 51% down to 39%
  • Entertainers/Artists: 50% down to 38%

Many of these industry trends are very promising and it’s beyond encouraging to witness what’s happening among restaurants, gyms, retailers, and beauty salons.

That said, thousands of small business owners in these industries continue to struggle. In other words, most SMBs are far from running a victory lap and need continued support from the government and their customers.

Some States See A Rent Recovery?

While the national average shows that 31% of all small businesses couldn’t make April rent, some states are in line with that average, while other are way beyond it — on both extremes.

First, the promising news: here are the states on the lower end of the spectrum in April, where fewer than 25% of the SMBs are having trouble paying the rent:

  • VT — Only 5% couldn’t pay their rent on time and in full in April.
  • MN — 21%
  • MT — 21%
  • OR — 22%
  • AR — 22%
  • OH — 24%
  • UT — 24%

Now, let’s see which states are still suffering the most:

  • OK — 42%
  • KY — 41%
  • NJ — 39%
  • HI — 39%
  • MD — 38%
  • NY — 36%
  • GA — 36%
  • WV — 36%
  • MI — 35%
  • ID --  35%

Meanwhile, several other big states are pretty much at or near the national average, including:

  • TX — 31%
  • NC — 31%
  • IL — 31%
  • FL — 32%
  • CT — 32%
  • CA — 33%
  • SC — 33%

For more details on different industries and states, please reach out to me at chuck@alignable.com.

To review other Alignable polls conducted since March 2020, please go to the Alignable Research Center.


About The Alignable Research Center

Alignable is the largest online referral network for small businesses with over 6 million members across North America.

We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.

The post 53% Of Minority-Owned SMBs Can’t Afford April Rent appeared first on ValueWalk.

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