Paddy Graham

The firm has said it expects to find more businesses with good growth potential in Scotland to back after growing its portfolio over the last year against a challenging backdrop.

Paddy Graham, who leads BGF’S Central Scotland and Northern Ireland team, told The Herald that there was no denying the devastating impact COVID-19 is having on Scottish businesses, especially in the hospitality and leisure sector.

He said: “Clearly there’s reason to be cautious about how quickly some businesses will be able to achieve or even focus on growth.”

However, Mr Graham said the conversations BGF has been having have given the firm reasons to be cautiously optimistic.

He added: “Whatever the situation, entrepreneurs will rarely want to stand still for too long.”

Mr Graham believes there will be opportunities for BGF to use its financial muscle to help firms that may think the time is right to use acquisitions or moves into new markets to fuel growth.

He said: “We anticipate a high level of mergers and acquisitions activity next year, with entrepreneurs acquiring businesses that have been struggling to scale in recent years and are therefore seeking a new home. “

BGF appears to be creating interest among business owners who are reviewing their plans in response to the challenges posed by the pandemic and the potential for it to trigger changes to the tax regime.

The firm has recorded a “sharp uptick” in inquiries over the last few weeks from companies either directly or through their advisers.

Mr Graham continued: “Some business owners have pushed back their exit timelines, potentially by a year or two, and are looking to increase the value of their business during this time.

“Others have taken on additional debt and now want to strengthen their balance sheet. We’ve also seen owners seeking a liquidity event before likely changes to Capital Gains Tax.”