Cities across the country are experiencing rising cost of rent, and small businesses are paying the price. If your small business has started to suffer from the rising cost of living it may be time to rethink your financing plan and consider a capital advance.The rising cost of rent—due in part to increased occupancy rates for retail and other commercial spaces—is having a positive impact on property owners. But, it has been a death sentence for some small businesses that rely on their ability to rent retail and office space.
New York City has been making headlines recently over the drastic increase in monthly rent expenditures and the negative impact these expenses have had on small businesses. In February, New York City Mayor Bill de Blasio announced Small Business First to reduce burdens on small businesses in an attempt to boost productivity by making it easier for small businesses to comply with the city’s regulations.
Kate Rogers of NBC News noted in an article discussing New York City’s rent crisis, “In New York City, office rental spaces and light industrial, or storefront, market rents have both increased year over year. Rents for both types of real estate are up nearly 21 percent since 2010, according to commercial real estate information company the CoStar Group.” The rent crisis is certainly not unique to New York, however, and small businesses across the country need to find ways to adapt to this rising cost without damaging their day-to-day operations.
Which Cities are Most Affected by the Rising Cost of Rent?
Rogers of NBC News notes the rising rent problem poses major problems for small business owners, with light industrial rents in San Francisco up 31 percent, and office space rents up more than 65 percent. Small businesses’ problem with the rent crisis is much larger than business owners have expected, working its way from manufacturing, to storage, all the way up to commercial real estate. Hans Nordby, managing director of CoStar Portfolio Strategy, stated, “From office space in San Francisco to retail space in New York or warehouse space in Seattle, hot local economies have driven strongly rising rents.” Small business owners need to find a way to cut costs from manufacturing to distribution, and find additional funding to adapt to the rising cost of rent. Activists in New York have launched the #SaveNYC movement to bring attention to the problem and preserve the city’s character, which relies on small business success.
Take on Rising Rent with a New Financial Plan
If your city is experiencing rent hikes it may be time to reconsider your financing plan. In a study conducted in the fall of 2014 run by the Federal Reserve Bank of New York, 40 percent of small businesses say they are struggling with acquiring new customers and managing their cash flow. Adding a capital advance to your small business’ financial plan can give you the cash you need to keep your business up and running while the cost of rent continues to rise. With a capital advance from Wellen, you can fund any number of endeavors you see fit to keep your business competitive in the ever-changing market.
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