About half of U.S. small businesses haven’t paid their full rent or mortgage yet this month as a result of the coronavirus pandemic, a new survey suggests.
In the poll, conducted on Thursday and Friday by Alignable, a small business social networking company, about 30% of the more than 1,000 respondents reported making no rent or mortgage payment in April, while 20% said they had made only a partial payment.
The remaining half reported paying their entire rent on time. Only a quarter of respondents said their landlord or bank offered a reduction or deferral on what they owed. The survey was of companies with up to 50 employees, including retail, restaurant, auto repair and other small businesses.
The preliminary findings illustrate the crisis affecting small businesses and how their troubles could set off a financial chain reaction that could inflict heavy damage on landlords and lenders across the U.S.
“I think this shows the time-sensitive need for the policy response to get liquidity in the hands of small businesses,” said Michael Feroli, chief U.S. economist at JPMorgan. “Half of all small businesses have only 15 days or less worth of cash buffers, and with shelter-in-place orders likely to persist they will need to replace lost revenue in a hurry.”
An estimated $20 billion in monthly retail real estate rents are due as early as this week, according to Marcus & Millichap, a commercial real estate services and consulting firm.