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What is advance guarantee?

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Anonymous

13y ago
Updated: 4/3/2023

buyer will sometimes make an advance payments to the seller to enebled them to start acquisition or production of goods.

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Judson Marks

Lvl 13
2y ago

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In civil construction projects advance is given to the contractor which is known is as Mobilization Advance. It is normally 15% of the total contract value. The prerequisite for the issue of advance is that contractor has to provide a guarantee in the shape of Bank or Insurance equal to the amount being issued to the contractor. Mobilization advance is deducted from the bills of contractor in equal installments covering the project period. On completion of recovery Guarantee provided by the contractor is released.


What is advance payment guarantee?

buyer will sometimes make an advance payments to the seller to enebled them to start acquisition or production of goods.


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Difference between Advance Payment Guarantee and Performance Bond?

Contract Performance Bonds - Contractors will usually be asked to provide a performance bond for up to 20% of the contract price to protect the employer.Advance Payment Bonds - In circumstances where advances are being given before work is carried out or material delivered an advance payment bond protects the party making the advance recover the funds if the work is not completed or materials are not supplied.


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