HALF of Scotland’s small to medium-sized businesses (SMEs) cited Brexit as one of their biggest concerns for the future of their firms, according to new research.

However, almost seven in 10 Scottish SMEs plan to expand over the next few years despite uncertainty about Brexit and the prospect of a second independence referendum, a survey carried out by business advisory firm Johnston Carmichael revealed.

It was conducted among over 300 SME bosses across Scotland and researches say it demonstrates the resilience of the country’s small to medium sized businesses.

The survey revealed that over 69 per cent of small to medium sized businesses have ambitions to grow organically in the short to medium term and states that if this figure is applied to Scotland’s total SME population of 326,000, it would suggest that over 226,000 business across the country believe they can achieve growth.

Nearly two thirds (65 per cent) indicated that they would fund their growth plans with cash generated by the business and just 12 per cent said that they would seek bank debt to finance their growth while 10 per cent identified private equity investors as a possible funding source. Just over a tenth said they would target growth through acquisition and nearly 13 per cent of respondents were planning to sell their business.

The research confirmed deep uncertainty among Scotland’s SMEs about the impact of Brexit with nearly half (47 per cent) viewing Brexit as their biggest concern for their business over the next couple of years. More than two fifths (43 per cent) also described the prospect of a second independence referendum as a main concern.

The survey sought to identify the issues affecting SMEs in Scotland and their growth ambitions and, when asked about barriers to growth, just over three in 10 respondents identified wider economic factors such as the exchange rate and the single market, while just over 28 per cent said the size of their marketplace could limit growth.

SMEs also consider recruitment an issue with a significant minority of businesses (15 per cent describing finding staff as a barrier to growth.

Andrew Ewing, partner and head of corporate finance at Johnston Carmichael, said: “It’s great to see that confidence remains high in Scotland despite the uncertainty associated with Brexit and the potential of a second independence referendum.

“At the moment, we simply don’t know what Brexit will mean in terms of free trade and the movement of people within Europe, but it appears that business owners have decided to carry on regardless until such time as there is more clarity on these issues.

“As always, SMEs need to be proactive rather than reactive and through planning ahead whether for sale, fundraising or acquisitions they can remove some of the uncertainty. It’s essential that they seek advice on dealing with the changes that lie ahead and we at Johnston Carmichael are well placed, as business owners ourselves, to provide the right level of perspective on these issues.”

Earlier this week, in response to Nicola Sturgeon’s plan to hold a second independence referendum, the Federation of Small Businesses (FSB) Scottish policy convener Andy Willox, said: “FSB survey work conducted after last year’s Scottish Parliament elections, but before the poll on Europe, revealed very little appetite amongst smaller firms for another independence referendum.”