It’s not getting ugly out there, it’s been ugly for six months.
Alignable is sort of like a LinkedIn for small businesses. The site allows firms to “align,” or create referral systems among them. Since April, Alignable has surveyed more than 5,500 businesses, asking among other things if they were paying their rent.
In April, 48% of businesses reported they could not make their full rent payment. The number dropped to 40% in May, and has since hovered between 32% and 34%. In the last week of August, 32% of businesses once again reported they weren’t going to make their full monthly rent payment.
Looking through the numbers, the polls showed:
7% expected to pay under 10% of their original, pre-COVID rent.
4% expected to pay between 10% – 25%.
6% expected to pay between 26% – 50%.
Another 6% expected to pay between 51% – 75%.
And 9% expected to pay 76% – 99%.
Of course, one man’s rent is another man’s (landlord’s) income. As we go through yet another month with businesses not making full rental payments, we get another month closer to a crisis in rental property because landlords have mortgages. Without rental income, they can’t pay their mortgages, which are typically backed by banks or bond investors, who stand in line to take a hit.