David Alexander, head of debt recovery at full-service law firm Gilson Gray, said: “The latest figures show a notable fall in corporate insolvencies in Scotland, with total cases down by around a quarter on the same quarter last year. On the face of it, that suggests some easing of pressure, particularly with reductions in both compulsory and creditors’ voluntary liquidations. However, it’s important not to read this as a return to stability just yet.

“We are still dealing with the long tail of post-pandemic borrowing, alongside higher operating costs and subdued consumer demand in a number of sectors. A fall in insolvency numbers may, in part, reflect businesses holding on for longer or delaying difficult decisions, rather than an underlying improvement in trading conditions. Time lags in registrations can also mask what is happening in real time.”

“From what we are seeing in practice, creditors remain focused on recovering what they are owed, and cash flow remains tight for many companies. Directors should not take too much comfort from a single quarter’s data. Being proactive with finances, addressing debt issues early, and taking professional advice at the first signs of distress remain key to avoiding more serious outcomes further down the line.”