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.