I have a vague memory that an eminent silk (possibly before taking silk) once advised that the greater power includes the latter - ie if the trustee has power to distribute capital to a beneficiary then it would include power to lend. The memory is hazy so not entirely reliable.
Alternatively, a discretionary trust might provide the trustee with power to appoint the trust fund onto new trusts, identical save for an additional power to lend to beneficiaries. The exercise of the power could be phrased in these terms - inserting a new clause providing a dispositive power to lend.
I would agree with Naomi that an exercise of any power to lend (with or without interest) should not involve an exit charge.
Osborne Clarke LLP