Client profile:

Lethenty Cabinetmakers Ltd
Icon Tick White Existing savings transferred into a SSAS
Icon Tick White Used pension to purchase briquette machine and pay off debt
Icon Tick White Pension provided a £50,000 loan to the business
Icon Tick White Second loan to boost the company's cash flow
Icon Tick White I was interested in pursuing Pension-led funding because it looked like I would be lending to myself and paying myself back which sounded a better option than going through a bank

“Out of adversity comes opportunity,” American author, politician, inventor and statesman Ben Franklin famously said.

Cabinetmaker Graeme Winram would certainly agree after rebuilding his business from the ashes of a devastating fire which destroyed the bespoke kitchen and furniture designer’s workshop and much of his stock back in April 2016.

With around six months of work on the order book and the goodwill of the local Aberdeenshire community, Graeme set about transforming Lethenty Cabinetmakers and turned to his pension for finance for the second time to put the finishing touches to the job.

“We were overwhelmed with the support and help we received from our community. We were offered the use of storage buildings, workshops, vans and tools. One tree surgeon even gave us four large Elm trees,” Graeme remembers.

“The fire at Lethenty Mill was certainly a major setback for us but, rather than dwell on what we lost, we saw this as a fabulous opportunity to really transform our business for the better.”

Prior to the fire the need to pay off debt and purchase a briquette machine as a way of creating additional income and dealing with workshop waste, first switched Graeme onto the possibilities of Pension-led funding.

“I have had funding through my bank before but I was interested in pursuing Pension-led funding because it looked like I would be lending to myself and paying myself back which sounded a better option than going through a bank.

“I am also keen at some point in the future to purchase the building I am currently leasing and that would be a good vehicle for doing it because then the building becomes owned by the pension fund.”

With our help Graeme’s existing pension was transferred into a Small Self-Administered Scheme (SSAS) and used to provide a £50,000 loan to Lethenty Cabinetmakers. With guidance from the pension trustees, Graeme set the interest rate at 12% with a five-year capital repayment term.

Fast forward to autumn 2018 and Graeme and his team of four, who have been with him since the beginning, have rebuilt their workshop just north of Blackburn in an ex-fruit picker’s building at Cairntradlin.

But the conversion took longer than anticipated and Graeme turned to his pension again to fund a £35,000 shortfall and boost the company’s cashflow.

Graeme made a second loan to his business from his pension, again at an interest of 12% with a five-year capital repayment term – to himself.

Lethenty produce some of the country’s most innovative kitchens from local timbers, buying hardwood trees from farms and estates, with customers from some of the most prestigious houses in Aberdeenshire and the National Trust for Scotland.

“I just love the whole process,” said Graeme. “It’s so satisfying to me to see the whole process through from a rough heavy log in a farmer’s field to a shimmering surface of a beautifully made piece of special furniture. Local Elm in particular has a wonderful rich colour and swirling grain patterns.”

The luxury handmade kitchens produced by Lethenty cost on average between £30,000-£40,000, take four-six weeks to make, a week to varnish and a further week to install. Graeme and his team have recently refurbished several kitchens he fitted 20 years ago. “Hopefully these kitchens will be good for another 20 years of service.”

Does Graeme, who has also worked as a ski instructor, tree surgeon and furniture restorer, have any advice to help his customers look after their investment? “Use it, enjoy it, relax with it – don’t roller skate on it.”

Graeme said: “Cabinetmaking is really what we do. Making kitchens is the mainstay of the business, that is 80 per cent of our work, but we do like the creative challenge of making bespoke furniture.

“We will always miss our old workshop at Lethenty Mill but we are very proud of our new facilities at Cairntradlin. It feels like we’ve really turned a corner and we are now all set for the future. The new workshop is bright, clean and efficient and we are now in an ideal position for growth.”

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