A substantial majority of businesses in Scotland is unconvinced an administration led by the Scottish National Party will be good for trade.

Most may welcome the new Scottish Executive's plans to slash business rates but a poll for The Herald shows while the SNP made lots of business-friendly noises in the election, it has some way to go to gain the confidence of many firms.

In the first systematic attempt to gauge the response of businesses to the SNP's electoral success, George Street Research found that 88% backed proposed reforms to the business rate system. These will mean around 120,000 small fry will be exempted from rates while 30,000 will have their bills cut by up to 50%.

Unsurprisingly, the proposals were backed by 94% of firms with sales of less than £2m contacted by George Street.

As 80% of firms with turnover of £10m-plus also thought the reforms would be positive for business, they appear to be seen as a useful contribution to the health of the wider economy.

However, when George Street asked how an SNP-led Executive would affect business in Scotland, only one in four respondents said the impact would be good. This compares with 20% who thought the administration led by Alex Salmond would have a bad impact and 38% who thought it would make no difference.

Around 18% of respondents did not know what impact the new ministerial team would have.

Participants in the exclusive poll for The Herald were not asked to give reasons for their answers. However, the results suggest that the Executive may have to address concerns in some quarters about what an SNP-led administration might mean for Scotland's position in the UK and scepticism in others about its ability to make a difference on the economic front.

Other findings of the Scotland-wide survey may also concern ministers, who will be advised by a panel of business heavyweights led by former Royal Bank of Scotland supremo Sir George Mathewson, recruited by the First Minister.

While Scottish Enterprise has come under repeated attack in recent years from the SNP, which has effectively accused it of being a huge waste of money, the survey suggests the jury is out on the development agency.

Forty-two percent of firms said they thought Scottish Enterprise was doing a good job, compared with 41% who said it was not doing a good job and 18% who did not know.

Only 2% thought the agency had a poor reputation.

The responses of big firms were in line with those from smaller players.

While 58% of firms welcomed proposals to scrap tolls on the Forth Road Bridge, 11% thought they would have a negative impact and almost a third, 32%, did not know. The result falls short of being a ringing endorsement of a significant policy initiative.

The Executive will take heart, however, from the fact that the research adds weight to a bulky body of survey evidence that suggests corporate Scotland is in good shape.

Some 67% of firms told George Street that they expected to be more profitable this year than in 2006, comfortably eclipsing the 18% braced for a fall in earnings.

On Wednesday, Lloyds TSB Scotland reported that expectations of growth among Scottish businesses were at near-record levels.

Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said he expected the Scottish economy to grow by 2.3% in 2007 compared with a trend rate of around 1.9%.

Concern over inflation and credit costs remain subdued Although 78% of respondents told George Street that four increases in interest rates since last August would hurt their business, they appear confident that this will be outweighed by other factors.

Other surveys have shown that buoyant consumer spending and the strong housing market north of the border have been helping firms in Scotland outperform peers in much of the UK in recent months.

Edinburgh-based George Street got responses from 101 businesses across Scotland. The sample was selected to include businesses of vary- ing sizes across a range of sectors.