Crucial Tips To Help Small Businesses Pay Rent As Delinquency Rate Soars

While news of the Federal Reserve potentially implementing future rate cuts has fueled optimism in the stock market, leading to its best performance since 2022, this positive outlook contrasts sharply with the ongoing challenges many small businesses face, particularly those owned by minorities. These businesses continue to grapple with obstacles such as rising rents, diminished revenue, persistently high-interest rates, and the specter of 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 a report from Alignable. The online referral network for small businesses reported the finding succeeds two straight months at 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 of entrepreneurs to pay rent raises worries about what else they cannot afford and boosts 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. Nearly 60% 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 options. Be sure to get whatever is agreed to in writing.

• Try renegotiating your rent. This might be daunting 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 renegotiation 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 the 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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