Advance payment guarantee

Trade finance - credit support.

An advance payment guarantee is a guarantee supplied by a party receiving an advance payment, to the party making the advance payment.

The advance payment guarantee is issued by a bank or insurance company in favour of the potential customer, to protect the customer against a contractor's failure to fulfil the contract satisfactorily.

It guarantees that the advance payment will be returned if that happens.

Also known as an advance payment bond.

See also

• Bid
• Bid bond
• Bond
• Customs bond
• Guarantee
• Letter of credit
• Performance bond
• Retention bond
• Standby letter of credit
• Surety
• Surety bond
• Tender
• Trade finance