On 19th December 2018, Forbes published a list of the best countries for the business in 2019; and the UK ranks at top. According to Mark Zandi, chief economist at Moody’s Analytics, “The businesses need strong supportive legal system, clear rules- regulations and complete property rights’ adoption. A well-performing economy demands low corruption.” The 161 nations were scaled on 15 different parameters including innovation, taxes, property rights, technology, corruption, freedom, investor protection and red tape etc. Other metrics considered for ranking the businesses include workforce, market size, infrastructure, risk factors and life quality. Being declared at top in the list of best business promising countries is another feather in cap for the UK. The guaranteed business loans in the UK being offered by direct lenders also contributed to this success.
What Were Dominant Factors That Ranked UK The Best Country For Business?
GDP growth: Britain’s quarterly economic growth was accounted as 0.6 % July to September 2018. The increased export and household spending were main drivers to achieve this growth rate. The net export demand contributed vitally to GDP growth because the annual trade deficit came down to £6.5 billion that was £6.8 billion in 2017. Exports of goods and services increased 1.1 % during 2018. The imports also showed an increment @ 0.8 %. Gross fixed capital formation (GFCF) rose almost 0.5 % in 3rd quarter. The construction output also picked up @ 2.3 % in 3rd quarter from 0.5 % in 2nd quarter. Growth in service sector has also been 0.6 %.
Unemployment: The unemployment rate slipped down to 4.2% during two consecutive years. According to UK parliament’s report, there were 499,000 unemployed young people aged 16-24 years during August-October 2018; the figure is 10,000 less than that in 1st Q 2018, and 24,000 less than that in 2017. The unemployment rate for young generation was 11.5% in August – October 2018, it is less than previous year.
Public debt: In June 2018, the net public sector debt was £1,792.3 billion; it is equivalent to 85.2% of GDP. The UK’s government gross debt was £1,763.8 billion for the financial year 2017- 2018. Government’s deficit was £40.7 billion in 2017- 2018, it is £6.5 billion decrease if compared to that of 2016 – 2017. It is 2nd consecutive year, when the net deficit has been 3.0% below to Maastricht reference value.
Inflation rate: The UK’s annual inflation rate fell to 2.3 % in November 2018; it was 2.4 % in October 2018. The improvement is as per expectations of numbers of economists. It is the lowest inflation rate after March 2017 mainly because of reduction in cost of food, non-alcoholic beverage, recreation, cultural activities and transport. The projected inflammation rate for 2022 is 2%.
Business support by the UK Govt.: The UK Govt. supports all size businesses in the line of expectations of business owners, investors and other stake holders. There are numbers of ways for funding a startup. Start Up loan scheme offers £25,000 loan at 6 % per annum fixed interest rate for the new businesses. Former Mayor of London Boris Johnson introduced ‘International Business Program’ to help the UK startup businesses set up the trade abroad. The government relaxed visa rules for 200 exceptional technology professionals. Tech City UK, a govt.-funded body, provides comprehensive support for technology businesses. Tech City UK runs free online learning programs also. Eligible SMEs willing to carry out innovation projects can borrow £100,000 – £1 million at low interest rate. Innovate pilot loan program has £50 million available to financially support innovations.
Business loans by direct lenders: Despite the flexible and easy to avail financial benefits being sponsored by the UK Govt., the numbers of businesses don’t get desired funds on the time. There may be different reasons but some common reasons are – bad credit history, poor balance sheet at bank, absence of asset to mortgage, absence of guarantor, urgency of cash etc. Thanks to wide network of online direct lenders offering no guarantor business loans at flexible terms and conditions allowing the business owner choose the repayment period. Bad credit business loans are also available for the businesses with poor credit history. The minimum documentation, simple application, better approval rate, quick processing, lightning fast funds transfer, tailor made deal, flexibility etc make the direct lenders a preferred choice of retailers and small businesses. The quick funds help the small business owners to face the short-term financial challenges and to grab the unexpected earning opportunities.
Some good predictions after Brexit agreement execution are encouraging the business owners in the UK to invest more. Businesses expect better growth because of abolishment of UK Corporation Tax rate; it is 20% at present and is expected to be 17% by April 2019. Once outside of EU, any significant changes will be introduced immediately in present regulations like zero VAT rate will be applied to all the exports from the UK. Most of the services to EU businesses are expected to be outside of VAT; guaranteed business loans by direct lenders will also be the one to encourage the establishment of new businesses in the UK.