Advance payment means the buyer pays all or part of the price before the goods ship or the service is performed. It is the seller’s preferred term, and in practice the one most dependent on relationship history rather than documentation. The point to hold onto is that it reverses the direction of risk: the seller no longer carries credit risk on the buyer; instead the buyer carries performance risk on the seller, with the money already gone and only a contractual claim in return, often against a party in another jurisdiction. That reversal is why advance payment guarantees exist, letting the buyer recover the sum if shipment never comes. Nothing defines the term — it describes payment timing — so the protection has to be built alongside it.
Why this entry carries no source list. This lexicon cites an official primary source wherever one exists and says plainly where none does. No body defines this term: it is commercial vocabulary, and what it means in any particular deal is whatever the document says. Citing a bank’s product page, an insurer’s brochure or a consultancy’s explainer would dress one firm’s usage as a general rule. The paragraph above therefore ends by naming what to read instead of the word.