By Lauren Wallace

Copyright thesouthernreporter

A new report from Begbies Traynor shows that in the second quarter of 2025, the number of Scottish businesses showing early signs of financial distress has increased both since the previous quarter and compared with this same time last year. In addition, the number of firms in critical distress is also rising. For many small and medium-sized businesses in the Borders, these figures reflect what they’ve been feeling on the ground: higher costs, squeezed margins, and uncertainty over demand. But there’s a bright spot. A local car retailer is offering a £1,500 grant to drivers in the Borders region to help them switch to electric vehicles, specifically when purchasing the Volvo EX30, Volvo’s smallest fully electric SUV. The grant is designed to apply whether a buyer purchases outright, takes a finance package, or uses PCP. John Cleland, the retailer principal at Clelands of the Borders, said this is an effort to “drive the charge toward electrification here in Borders,” while also giving local people a practical way to move away from rising fuel and running costs. The contrast between the strain on many businesses and the targeted help for consumers captures where the region stands: under pressure, but not without options. Those considering new ways to adapt are also exploring more flexible employment and operating models. For example, as firms look to expand, hire remotely, or navigate complex rules across UK and EU jurisdictions, resources that explain how to work with professional employment solutions are increasingly in demand. Remote People offers one such helpful guide, which can assist businesses seeking legally compliant, efficient ways to employ people beyond their immediate location without having to set up their own foreign entity. While grants like the Volvo subsidy help reduce immediate cost burdens for consumers, many businesses are calling for further support. They want more predictable energy costs, clarity on tax burdens, and investment in infrastructure such as broadband, which remains crucial for remote work and digital service providers. In the Borders, sectors like hospitality, small retailers, and local services appear especially exposed. Rising costs of raw materials, fuel, and wages are all contributing to stress, even as inflation falls somewhat nationally. For those businesses, shifting business models, offering more low-cost, accessible goods and services, or combining online sales with physical presence, may be part of the path forward. Despite the difficulties, the mood among many is cautiously optimistic. Grants that encourage electric vehicle adoption may reduce transport cost burdens for households, while strong public information about alternative employment structures gives hope that businesses can adapt rather than collapse. For local readers, the message is a mixed one: things are tough, but not without response. With the right support, many Border firms may yet avoid the worst of the downturn and benefit from new technologies, green incentives, and smarter ways of working.