International Payments

In what types of situations is a cash in advance payment typically used?

A cash in advance payment is typically used by a seller when the seller manufactures goods in accordance with a particular buyer's specifications and cannot sell such "custom-made" goods to another buyer. Cash in advance payment may also be appropriate when: (a) insufficient credit information on a buyer is available; (b) the buyer's credit is so bad that no other payment terms are desirable; (c) the political and/or economic situation in the buyer's country is so bad that no other payment terms are appropriate; or (d) a seller is enjoying a seller's market for a particular product.

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