Borrowing puts Scottish firms at risk

A third of Scotland’s top 500 companies are putting themselves at high financial risk because of their levels of borrowing to fund investment. That’s the view of business analysts Plimsoll Publishing.

A third of Scotland’s top 500 companies are putting themselves at high financial risk because of their levels of borrowing to fund investment. That’s the view of business analysts Plimsoll Publishing.

Plimsoll, which independently monitors company performance in the UK, France and Japan, and has a track record of predicting commercial trends, says rising interest rates are posing a challenge, and a slowdown in growth could affect the ability of some businesses to repay their debts.

 “On the surface, the Scottish economy has never looked so bright. The market is growing at a rapid pace, and last year was the third successive year that average sales growth in the top 500 companies outpaced the rest of the UK. But financing that growth is where the weakness appears. We have awarded 161 of the top 500 a financial danger rating. Total debt as a percentage of sales is rising, and now stands at 17%. This is substantially above the UK average and way above the picture in France,” said senior analyst David Pattison.