Advance Payment Guarantee (APG)

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What is an Advance Payment Guarantee (APG)?

An Advance Payment Guarantee (APG) is a financial instrument designed to instil confidence in commercial transactions by guaranteeing that the advance payment made by a buyer will be returned if the seller fails to meet the agreed terms and conditions of the contract. At Durga Finvest, we understand the critical role APG plays in fostering trust between transacting parties, ensuring smooth business operations, and mitigating risks.

Requirements for Advance Payment Guarantee (APG)

To obtain an APG through Durga Finvest, a few prerequisites need to be met

Valid Contract or Agreement

A documented contract or agreement between the buyer and the seller specifying terms, conditions, and the amount of advance payment.

Creditworthiness Assessment

Financial evaluation to ascertain the credibility and financial stability of the parties involved.

Compliance with Legal Regulations

Adherence to legal norms and regulations pertinent to the transaction.

Types of Advance Payment Guarantee (APG)

There are different types of APG catered to diverse business needs:

Bid Bond Guarantee

Ensures the buyer’s commitment to the terms during a bidding process.

Performance Guarantee: Guarantees the completion of agreed-upon terms as per the contract.

Payment Guarantee: Ensures the repayment of the advance payment if the seller fails to fulfil the contractual obligations.

Retention Money Guarantee

Assures the retention money’s return if the contractual terms are met.

Required Documents and Eligibility 

Required Documents 

Required Eligibility 

To apply for an APG, the following documents are typically needed:

1. Official Contract or Purchase Order

2. Company Registration Documents

3. Financial Statements

4. KYC Documents

5. Any other specific documents based on the nature of the transaction

1. Buyer-Seller Agreement: Both parties must have a mutual agreement regarding the terms of the transaction.

2. Financial Stability: Demonstrable financial stability and the ability to fulfil contractual obligations.

3. Compliance: Adherence to legal and regulatory requirements governing the transaction.


Give Your Business a Long-term Security with APG

At Durga Finvest, we offer comprehensive assistance in acquiring an APG, guiding you through the entire process to ensure a smooth and secure transaction experience.

Trust Durga Finvest to be your trusted partner in obtaining an Advance Payment Guarantee, providing a wide array of financial solutions tailored to your business needs. Contact us today to discuss how we can support and streamline your business transactions.


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An Advance Payment Guarantee is a financial guarantee issued by a bank or financial institution on behalf of a seller (applicant) to assure a buyer (beneficiary) that an advance payment made by the buyer will be refunded in the event the seller fails to meet their contractual obligations.

APGs are used in international trade and business transactions to build trust between the buyer and seller. They provide the buyer with confidence that their advance payment is secure, reducing the risk of non-performance by the seller.

When a buyer makes an advance payment to a seller, the seller provides an APG issued by a bank to the buyer. If the seller fails to meet their obligations, the buyer can present the APG to the bank to recover the advance payment.

  • Applicant: The seller who requests the APG to provide assurance to the buyer.
  • Beneficiary: The buyer who receives the APG to ensure the safety of their advance payment.
  • Issuing Bank: The bank that issues the APG on behalf of the seller.
  • Confirming Bank (optional): A bank that adds its confirmation to the APG to enhance the beneficiary’s confidence.

APGs are typically non-transferable, meaning they can only be used by the beneficiary (the original buyer) and are not transferable to third parties. The terms and conditions should be clearly defined in the APG.