What is an Advance Payment Bond?

An Advance Payment Bond is a Guarantee supplied by a party receiving an advance payment to the party advancing the payment. It provides that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled.  They can also be called advance payment guarantees.

What are the Benefits of Advance Payment Bonds?

As these bonds enable payment of cash to be made in advance of work being carried out they provide significant cash flow benefits to the contractor.

Specimen ADVANCE PAYMENT BOND