The independent Scottish law firm says large companies are more dependent on investment funds than smaller firms. Nearly double the proportion of large firms (35%) said they needed investment to survive compared to small firms (18%), with Morton Fraser pointing to Brexit preparations as the key reason.

According to Morton Fraser, those in survival mode are likely to use funds to protect their businesses from the impact of Brexit. From stockpiling supplies to paying for tax and international trade advice, building new trade routes or planning operational changes, the firm says the cost of preparing for Brexit is just the beginning of a longer-term programme of adjustment.

Iain Young, Partner and Head of the Corporate Growth team at Morton Fraser, said: “The fact that so many companies view investment funds as a stop-gap to plug financial shortcomings is telling. Whether it be bank debt or crowdfunding, private equity support or government grants, businesses are saying they need this support just to endure what is becoming an increasingly precarious trading environment."

“The larger the company, the more preparations are required and the greater the risks associated with a no-deal Brexit. It is therefore no surprise that larger companies have characterised their most recent investments as essential to their survival.”

Morton Fraser says a quarter of Scottish businesses are also preparing to go to market to seek a further £7.5 billion from investors and banks in the coming two years. Its study has shown that Scottish businesses will seek out on average £1.3 million in support to help them compete in a post-Brexit world. Large companies with 250 employees or more will seek on average £2.76 million, while small companies will on average aim to secure £82,600.

Iain Young added: “Investment has long been associated with growth and opportunity. Today, many businesses are aiming simply to survive the upheaval of Brexit. Investment has different uses now – and much of those uses are linked to shoring up a business in readiness for leaving the European Union, or to attempt to prosper in spite of its effects.”