Global connections anytime, anywhere

Trade Financing Terms -
Cash In Advance

Global connections anytime, anywhere

WHAT IS CASH IN ADVANCE OR ADVANCE PAYMENT?

The Cash in Advance or Advance Payment method entitles advancement of cash from the buyer to the seller. Paying in advance offers the greatest protection for the exporter and places the risk on the buyer. Payment does not assure the shipment or delivery of the goods from the seller and the buyer will rarely put down cash up front before he reasonably assures himself that the goods will be shipped and that the type of goods ordered will be delivered.

Although this method of payment is not uncommon, requiring full payment in advance may cause lost sales to a foreign (or even another domestic) competitor who is able to offer more attractive payment terms. In some cases, however, where the manufacturing process is specialized, lengthy or capital-intensive, it may be reasonable to insist upon partial payment in advance, or on progress payments. This method is often too expensive and risky for foreign buyers, but useful when shipping to politically unstable counties, when the buyer's credit is unsatisfactory and when goods are custom made to customer's order.

Section :  Resources

Contact Us

   Contact Details
       Head Office
   Online Feedback
   Sitemap
   Legal Documents




Resources

   Articles
     Glossary of International Trade Terms
     INCOTERMS
     Export Strategy
     Pricing & Quotations
     Documentation, Shipping & Logistics
     Technology Licensing & Joint Ventures

   Trade Financing Terms
     Letter of Credit
     Draft
     Cash in Advance arrowside3a
     Open Account
     Consignment
     Forfaiting
     Other Trade Finance Terms
     Letters of Credit Glossary
     Documentary Collections Glossary

   Links Center

   Trade Document Samples


 

© 1996 - 2015 AGV . All Rights Reserved .

 Referral Program | Sitemap | Disclaimers | Home

AGV reserves the right to  make changes to the contents, description and features of this website without prior  notice.