diff --git a/.changeset/calm-pans-work.md b/.changeset/calm-pans-work.md
new file mode 100644
index 0000000000..b74c02d243
--- /dev/null
+++ b/.changeset/calm-pans-work.md
@@ -0,0 +1,5 @@
+---
+'@backstage/backend-common': patch
+---
+
+Resolve the `basePath` before constructing the target path
diff --git a/packages/backend-common/src/paths.test.ts b/packages/backend-common/src/paths.test.ts
index a9a557c8fe..6073d43a24 100644
--- a/packages/backend-common/src/paths.test.ts
+++ b/packages/backend-common/src/paths.test.ts
@@ -59,5 +59,11 @@ describe('paths', () => {
         'Relative path is not allowed to refer to a directory outside its parent',
       );
     });
+
+    it('should not throw an error when a folder is referenced that doesnt already exist', () => {
+      expect(resolveSafeChildPath(workspacePath, 'template')).toEqual(
+        `${workspacePath}/template`,
+      );
+    });
   });
 });
diff --git a/packages/backend-common/src/paths.ts b/packages/backend-common/src/paths.ts
index 0e784a60db..c77f232633 100644
--- a/packages/backend-common/src/paths.ts
+++ b/packages/backend-common/src/paths.ts
@@ -63,15 +63,17 @@ export function resolvePackagePath(name: string, ...paths: string[]) {
  * @returns A path that is guaranteed to point to or within the base path.
  */
 export function resolveSafeChildPath(base: string, path: string): string {
-  const targetPath = resolvePath(base, path);
+  const resolvedBasePath = resolveRealPath(base);
+  const targetPath = resolvePath(resolvedBasePath, path);
 
-  if (!isChildPath(resolveRealPath(base), resolveRealPath(targetPath))) {
+  if (!isChildPath(resolvedBasePath, resolveRealPath(targetPath))) {
     throw new NotAllowedError(
       'Relative path is not allowed to refer to a directory outside its parent',
     );
   }
 
-  return targetPath;
+  // Don't return the resolved path as the original could be a symlink
+  return resolvePath(base, path);
 }
 
 function resolveRealPath(path: string): string {