§ Mr. Arbuthnot
asked the Chancellor of the Exchequer what types of assistance he is prepared to make available under the Distribution of Industry (Industrial Finance) Act, 1958; and for what purposes.
§ Mr. Erroll
Loans or annual grants (and, in some cases, both) may be made to a person or company whose undertaking has good prospects of success but who is unable for the time being to obtain all the capital required on reasonable terms from normal commercial sources. Such assistance may be made both for undertakings already established and for undertakings to be established, provided that they will help to reduce unemployment in localities having high and persistent unemployment.123W
The types of assistance offered are:
Loans—1. for the acquisition of premises, plant, machinery, and equipment of all kinds;
2. for working capital.Repayment terms are adapted to meet the circumstances of the applicants' business.Repayment period can be spread, if necessary, over twenty years or more, (Repayment can be made earlier than the due date without payment of a premium.)Interest is charged at a moderate rate (usually a little lower than the market rate); where a new business is being established, payment of interest may be deferred until the business is fully established or the loan may be made free of interest for the first year or two.Annual Grants—1. towards initial expenses directly attributable to setting up business in a particular locality which make the undertaking temporarily uneconomic, e.g., costs of clearing a factory site, building an approach road, transferring key workers, training new labour, or rent of premises;
2. towards the cost of paying interest on money borrowed for the undertaking.