Protect upfront payments made to contractors
Advance Payment Guarantee
An Advance Payment Guarantee safeguards the Project Owner when upfront payments are made to a contractor to kickstart a project. These advances help contractors mobilize resources, such as purchasing materials or equipment. If the contractor is unable to perform or defaults before delivering work, the guarantee ensures reimbursement of the unused advance. This bond strikes a balance by supporting the contractor's liquidity while protecting the Project Owner from potential financial losses due to non-performance.
Key Benefits
Protection for upfront payments
Contractor mobilization support
Reimbursement guarantee
Project kickstart facilitation
Financial loss prevention
Risk mitigation for owners
Working capital support for contractors
Common Use Cases
- • Construction mobilization
- • Material procurement
- • Equipment purchase
- • Large project startups
How It Works
Step 1: Advance Payment
Owner provides upfront payment to contractor
Step 2: Guarantee Issued
Contractor secures advance payment guarantee
Step 3: Protection Period
Guarantee covers unused advance if contractor defaults
Target Audience
Project owners providing advance payments, contractors requiring working capital