Advance Payment Guarantee

Issuing Bank: [Bank Name] · Contractor (Applicant): [Name] · Buyer (Beneficiary): [Name] · Contract Reference: [Number] · Amount: [Amount, typically matching the advance payment] · Date: [Date]

1. Guarantee

At the request of Contractor, [Bank Name] hereby unconditionally and irrevocably guarantees payment to Beneficiary of up to [Amount], representing the advance payment made by Beneficiary to Contractor under contract reference [Number], in the event Contractor fails to deliver the goods/services as agreed or fails to repay the advance as required.

2. Reducing Balance (if applicable)

[ ] This guarantee amount reduces proportionally as Contractor delivers goods/services and Beneficiary confirms acceptance, per the schedule in Exhibit A. [ ] This guarantee remains at the full amount until expiration or release.

3. Demand for Payment

Beneficiary may demand payment by submitting a written demand stating Contractor's failure to perform, [with supporting documentation as specified], within the validity period below.

4. Validity Period

This guarantee is valid from [Date] until [Expiration Date], after which it expires unless a valid demand was made before that date.

5. Release

This guarantee is released upon [Beneficiary's written confirmation of full contract performance / expiration of the validity period, whichever occurs first].

Issued by: [Bank Name] Authorized signature: ______________________ Date: ____________

*This document is provided for informational and educational purposes only — a real advance payment guarantee must be issued by the contractor's bank, not drafted by the contractor. This outline shows a buyer paying an advance what protection to expect and request before releasing funds to a contractor upfront.*