Scottish business leaders have warned that access to investment capital is drying up, according to MFMac’s biannual survey of Scottish business leaders.
The study found that almost half (48 per cent) rate the availability of investment capital in Scotland as scarce or very scarce. Just eight per cent describe investment as readily available, sparking fears that Scotland’s growth ambitions are being choked off.
As a consequence, firms are concentrating on ‘defensive’ strategies in the months ahead, such as increasing revenue (79 per cent) and improving operational efficiencies (65 per cent), with little headroom for growth strategies such as entering new export markets (six per cent) or product diversification (22 per cent).
A flat economic outlook is the primary barrier to growth, with two-thirds (67 per cent) identifying the uncertain economy as their biggest challenge, with more than a third (38 per cent) calling conditions “weak”.
Official data shows that GDP per head in Scotland is estimated to have grown by just 0.2 per cent during Q1 2025, while annual real GDP per head grew by 0.3 per cent in the whole of 2024.
Meanwhile, the volume of private sector investment in Scotland has slowed in 2025 after building some momentum last year. Mid-market private equity deals in Scotland fell 14 per cent in the first half of 2025, while the number of venture capital deals recorded in Q1 declined by six per cent compared to the previous quarter.
Chris Harte, chief executive of MFMac, said: “It is proving hard for Scottish businesses to shake off the effects of wider economic stagnation, which might explain why many leaders think investment capital is so scarce. Scotland remains one of the UK’s top destinations for foreign investment, but domestic capital investment is looking harder to come by.”
And with the Scottish Parliamentary Elections due in the first half of next year, business leaders want politicians to address the long-term fundamentals required to create the conditions for growth. These include business taxation and reliefs (37 per cent), greater access to sector specific funding (23 per cent), and skills and education (21 per cent).
He added: “There are still plenty of pockets of resilient, ambitious businesses looking to expand products and services, or enter new markets. But the broad view suggests businesses are being held back by a lack of investment capital and a fragile economy. The two feed off each other.
“Business leaders want to see long-term measures in place to create the conditions for growth. This will be a key battleground for the business community when the debate around the next Parliament begins.”