What Is An Advanced Payment Bond

An advanced payment guarantee, also known as a cash guarantee, is used advanced payment when a commercial contract is issued to guarantee that payment gets made to the company that is doing the work. An advance payment guarantee also makes the promise that the payment will be returned to the buyer if the seller does not complete their contractual obligations to deliver the goods or services required.

There are 1000s of different types of advance payment assurance in existence. For example, one type of advance payment guarantee in construction uses this guarantee to ensure that the work a company is doing is done thoroughly and properly. If the work is not done completely the person who contracted that construction company will be able to get their money back for the job that was left incomplete by the construction company.

The advanced payment guarantee provides legal security by offering a unique kind of protection to the buyer. The advanced payment bonds provide security through guaranteeing that the contracted company will provide the goods or services that they are contracted to provide before complete payment is made. If the entity that is hired to do provide a good or service does not provide that service, the buyer has a money-back guarantee on their investment.