Sometimes it is customary for the purchaser to make advance payments to the supplier. This is contained in the contract between the parties. These prepayments facilitate financing of the project for the supplier, especially in the design and run-up phase. During this phase, drawings are often made, materials and components are purchased and investments in means of production are made.
In exchange for these advance payments, the purchaser will require an advance payment bond from our client. With this, the purchaser is assured of repayment of the advance he has paid in the event of bankruptcy.
- Payments received earlier
- Makes financing of a project easier for the supplier