Earlier this week, Theresa May’s government announced the UK’s intention to trigger Article 50 on 29th March.

With 18 months to agree a Brexit deal followed by a six-month ratification period, the Scottish National Party has now urged its compatriots to support a bid for a second independence referendum between autumn 2018 and spring 2019. 

?? Our nation's future. Your choice. Sign the pledge in support of Scotland's referendum: https://t.co/1bMMI5vAhx #ScotRef pic.twitter.com/AWbVdOl5Wm

— The SNP (@theSNP) March 13, 2017

However, Rishi Khosla, CEO of OakNorth Bank, believed this decision could jeopardise the availability of commercial finance for Scottish businesses.

“It’s very likely that the Scottish referendum will impact lenders’ appetite for deals north of the border as it just adds another layer of complexity and uncertainty to the already existing unknowns created by Brexit,” Rishi explained.

“This is coupled with the fact that England, Wales and Northern Ireland account for 40% of Scotland’s tourism and 60% of its exports, so lenders will be concerned with how businesses in the hotel and leisure sector – as well as those that rely heavily on exports to the rest of the UK – will fare if the country votes for independence.”

These concerns were supported by research from Lloyds Bank, which found that economic uncertainty in the wake of the EU referendum was considered the biggest threat to UK businesses.

‘A paralysis to economic activity’

Like Rishi, Sam Howard, COO at Regentsmead, warned that the fallout from a second referendum could restrict the flow of money into Scotland. 

“…Markets want certainty and adding a potential new referendum to the Brexit negotiations may bring a paralysis to economic activity.

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“People [will] wait to see … what happens before making investments, starting developments and committing capital.”

And while a number of lenders – including Hope Capital and Secure Trust Bank – have entered Scotland in recent years, Mike Strange, managing director of Funding 365, insisted that another referendum could see this trend falter.

“The coming years will be challenging for the UK as it goes through a tough negotiation process with the EU.

“Unity among the UK nations through this period would certainly help [to] contribute to successful negotiations.  

“There must be legions of businesses (Funding 365 being one) who are unwilling to make an investment into establishing operations in Scotland when some fundamental questions are yet to be answered, including the currency that an independent Scotland would use.”
 

Scotland may have to adopt the euro in order to rejoin the European Union

Nevertheless, Bob Sturges, head of PR and communication at Fortwell Capital, suggested that Scotland’s loss could be London’s gain.

"Should Scotland vote for and achieve independence from the UK, one immediate consequence would be a flight of capital and well-remunerated jobs from Edinburgh and other commercial centres to London. 

“This would obviously be good for the metropolis's economy and commercial property sector.”

However, this influx of jobs may do little to counteract a possible exodus of London’s financial services workers should larger banks look to relocate to mainland Europe. 

And with the very real possibility that Scotland will also leave the EU prior to a referendum being held, Sam admitted that Scotland could become doubly unappealing for lenders.

“Neither unpalatable situation helps the economy and would probably make lenders extremely nervous about lending in the new independent Scotland.

“’Better Together’ was the old slogan and I tend to agree.”