The Scotland SME Access to Finance Report 2025 found that 42% of respondents faced barriers to securing finance, around twice the rate in Wales and Northern Ireland (both 21%). This was also up on the 38% recorded in Scotland the previous year.

Firms in Tayside, Central Scotland and Fife were most likely to report barriers in access to finance, at 52% of respondents from these regions, while only 28% of smaller businesses in the South of Scotland said they faced obstacles.

The ability to obtain or repay finance was the most common barrier reported, with a 51% share of those stating they faced difficulties securing funding. Lack of awareness or availability of support was second, at 17%, while the complexity and time required for applications followed with 16%.

However, despite an uncertain macroeconomic backdrop, 41% of the Scottish businesses surveyed expect to grow over the next 12 months (26% in Wales and 61% in Northern Ireland). To help fund that, the same percentage anticipate needing additional finance – a slight rise on 39% last year.

At the same time, the share of Scottish businesses confident in meeting their future external finance needs remained the highest of all devolved nations at 70% of those expecting to need access to funding over the next year (61% in both Wales and Northern Ireland) and was slightly up on the previous year’s 68%.

Of smaller businesses with debt, 92% said their current levels were manageable. 14% of respondents in Tayside, Central Scotland, and Fife reported challenges with managing debt, which was the highest of any of the Scottish regions.

The research follows the British Business Bank’s Small Business Finance Markets report, which found that Scotland ranked second last year in the UK, behind only London, for equity deals involving smaller businesses. The Bank also launched its £150 million Investment Fund for Scotland during late 2023 to help address imbalances in access to finance across the country.

Susan Nightingale, director UK Network, at the British Business Bank, said: “Overall, our Scotland SME Access to Finance Report shows smaller businesses, and the financial ecosystem that supports them, are in reasonable shape and levels of optimism are broadly as high as 12 months ago.

“There is a healthy appetite for finance, however, there is an ongoing need to ensure businesses – irrespective of location, size or sector – that require finance to start up, scale up, or stay ahead are aware of the range of options available; understand which option is the most appropriate for them; and are equipped with the right information to maximise their chances of success.

“This research plays a crucial role in shaping a more targeted, effective approach to supporting businesses across the breadth of Scotland, as they embark upon or continue their finance journey. By enhancing access to finance and providing the right guidance, we can strengthen the ecosystem that helps businesses thrive, innovate, and grow.”

Hugh Lightbody, chief officer at the Business Gateway National Unit, added: “At Business Gateway, we recognise the vital role that the SMEs we work with play in driving the economy.

“By partnering with the British Business Bank on its annual finance survey, we will help ensure that the voices of all businesses are heard. These insights will shape future financial support and funding options, making it easier for businesses to access the resources they need to grow and succeed.”