MacLeod Construction

MacLeod Construction continues to build its business with Santander who recognises the importance of its business practices.

In Brief

  • MacLeod Construction is a 40-year-old family-run business that has remained profitable and continued to grow in the face of economic upheaval.
  • One of its core practices – building up a 'land bank' for construction projects – proved a sticking point for its former lender who was no longer able to support this practice.
  • Santander understood that this approach was central to the way the company operated. After visiting the client to fully understand the business, Santander offered a finance package that included a working capital overdraft, asset finance, trade finance and day-to-day banking, to enable MacLeod Construction to continue as planned.
  • The customer implementation manager ensured that the changeover to Santander’s day-to-day banking went ahead smoothly and without any disruption to the business.
  • MacLeod Construction can now continue buying land as it becomes available – a vital part of its business practice. The funding also allowed the business to buy more vehicles and machinery. The business now has a solid future, and the company can talk about succession plans.  

Set up in 1975 by twin brothers Kenny and Murdo MacLeod, MacLeod Construction is now a £20 million business, employing a core staff of 200 with an additional 100-plus subcontractors at any given time. The Argyll-based business manufactures and assembles timber-framed buildings across the region and constructs housing, industrial and commercial buildings, as well as health and leisure facilities.
Strength in recession

Despite being one of the largest privately owned businesses in the region, and one of its key employers, the MacLeod brothers have seen their fair share of economic peaks and troughs. During the most recent downturn, the company moved from private sector work to local authority and housing association contracts, and this responsiveness has been a significant growth driver.

Nonetheless, the severity of the recession affected MacLeod Construction’s relationship with its incumbent bank. The MacLeod brothers had been with their bank since their earliest days, but one of the company’s core practices of 'land banking' – buying up and preparing sites in readiness for construction work – suddenly became an issue. The brothers had previously used their overdraft to cover land purchases and servicing, enabling the company to move quickly once building contracts were signed. “During a financial review meeting, the bank announced that they could no longer support this,” says Greig MacLeod, Kenny’s son and the company's Business Development Manager. “We enquired about other options but unfortunately they were not able to offer services to support all of our business requirements.” And so the MacLeods began searching for a new bank.

An attractive prospect

As a business of considerable size and with a solid track record, MacLeod Construction would have been attractive to a number of players. But Santander Relationship Director Deborah Gallacher, who already had a connection with the company, took the initiative of getting to know more about this important local business and contacted the MacLeod brothers just as they began their search.

“They weren’t without their suitors,” says Deborah. “The business has an excellent track record and has been consistently profitable, adapting their business model to fit the economic climate. The fact that the MacLeod team were great to work with made the opportunity to become their bankers even more attractive.”  

Deborah and a Santander Product Partner visited MacLeod’s main sites and the areas in which it operates. The bank gained a highly positive view of the company along the way. “We were able to gather information to make an application to the credit team,” says Deborah. “By that stage, the field had been narrowed down to three banks.”

A different approach

Deborah and the team took the trouble to ask the MacLeod brothers about their specific requirements and then tailor a suite of solutions that best suited their company’s long-term needs. “The team visited us and took the time to ask questions about what we, as a construction company, were looking for in a bank,” says David. “Santander were the only ones to do this. They definitely had a different, more personal approach.”

The bank offered a £1 million trade finance facility, and a working capital overdraft facility of £3 million. The bank also set up a £950,000 asset finance line, which MacLeod uses to buy plant machinery and vehicles. “Contracts with housing associations normally need a performance guarantee of 10%,” says MacLeod’s Finance Manager David Renwick. “Santander provides these guarantees on our behalf via this facility.”

The big switch

The transfer of MacLeod’s day-to-day Banking arrangements took place in September 2013. For a business as large as MacLeod the switch would be a considerable challenge, as payroll, direct debits and tax payments all had to transfer smoothly. “From an operational side, having an Implementation Manager on site on the first payroll day was crucial,” says Deborah. “The changeover needed to work seamlessly, because of the company’s local reputation.”

Santander Customer Implementation Manager Andy Thompson oversaw the operation. Macleod Finance Manager David Renwick explains that Andy took the business through each stage of the transfer, from the initial form filling to looking at individual direct debits and transfers, to following up after the changeover went through. “Andy visited us several times to make sure everything went smoothly,” says David. “The result was that it all went through in a pretty seamless way.”

A rewarding experience

Gaining a new relationship with Santander will allow MacLeod Construction to continue with a practice that is fundamental to the way they do business, and means the brothers can look forward to continuing their thriving family company.

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Relationship Director Comments


The business has an excellent track record and has been consistently profitable, adapting their business model to fit the economic climate. The fact that the MacLeod team were great to work with made the opportunity to become their bankers even more attractive.

Deborah Gallacher