Discrimination in Leasing to Small Businesses (1) -The Absence of Small Retailers from Shopping Paying Ability (33)—Variations in Reliance on Cov- 4. The Pressure of Maximum Debt Financing on the Tenant Rent Structure The Pressure for Maximum Financing (44)-Diffi- 5. The Reluctance of Small Retailers to Accept Occupancy in a Prime Retail Location Reluctance to Accept Center Tenancy (53)—Unwill- 43 53 Table Page 1. Proportions of Single Unit and Multiple Unit Retail Establishments at New Business Locations in 2. 1962 Versus Proportion of Retail Establishments in 1958 and 1963 Censuses of Business........ 5 Business Firm Population by Major Industry 3. Number of Retail Establishments at New Business Locations by Size of Company and Dun & Bradstreet Rating of Company 4. Total Rent as a Percentage of Sales for Selected Lines of Retail Business-Trade Average and Shopping Center Average 19 21 .60 THE EXCLUSION OF SMALL RETAILERS FROM PRIME RETAIL LOCATIONS The federal government inaugurated a limited program of small business lease guarantees in 1967 to assist small firms, displaced by urban renewal or other government projects, to relocate their operations. In January, 1968, the limited program was expanded to make all small business firms eligible for lease guarantee insurance coverage. The expanded program is believed, by its proponents, to be a significant breakthrough which enables small business concerns in manufacturing, wholesaling, and especially retailing, to compete with larger firms for choice business locations. The major intent of the lease guarantee program, as envisioned by Congress, was to strengthen the competitive enterprise system by assisting small business concerns to obtain leases on commercial or industrial property where traditional credit standards allegedly tend to exclude small firms. The lease guarantee insurance program offers the small businessman seeking a choice location a substitute for a larger net worth statement, at least for purposes of leasing. The new program is designed to benefit the small businessman by elevating his credit status to enable him to overcome the difficulty and alleged discrimination which small business has encountered in trying to lease prime locations in shopping centers, downtown business districts, industrial parks and in other commercial districts. Discrimination in Leasing to Small Business To evaluate the importance and probable impact of the government lease guarantee program first requires an understanding of the problem which the small businessman has faced whenever he sought to obtain a prime business location. The situation has been particularly acute in retailing where the advent of the suburban shopping center revolutionized |