Anti-Assignment Clauses and The Regulatory Response To Small Business Finance

2. The significance of small businesses, alternative financing methods and the anti-assignment clauses

A recent OECD assessment(10) has pointed out that while alternative financing methods such as factoring, leasing, hire-purchase and supply chain finance are present in post-Covid recovery packages, they are not prominent. Particularly, supply chain finance and factoring are significant financing mechanisms for small businesses. Supply chain finance is a type of finance whereby the debtor/customer decides to waive anti-assignment clause in favour of a particular financier and under the condition that the anti-assignment clause will be in force against that supplier so that supplier cannot assign to another financier. This type of finance may have anti-competitive characteristics and is regarded as an industry workaround.(11)…

It is perhaps appropriate to say what is meant by “access to finance” here, too.…