# Advance

*Last updated: 2026-06-23*

> An advance is a payment made by a principal before the agreed service has been performed or invoiced.

An advance is a payment made by a principal before the agreed service has been performed or invoiced. In logistics practice, advances arise when capacity must be locked in, customs duties pre-financed, or storage slots secured – typically on high-risk trade lanes or with operators that do not extend open credit terms. Payment may be made in full or in tranches and is offset against the final invoice; if the service is not delivered, the amount must be refunded. In the freight context, an advance often covers specific third-party disbursements such as port charges, duty payments, or freight contributions, which distinguishes it from a contractual deposit structured as partial performance and security. For the principal, the advance carries a default risk that can be mitigated through bank guarantees or the selection of reputable service providers.

**Source:** [https://www.businessdictionary.com/definition/advance.html](https://www.businessdictionary.com/definition/advance.html)

## Quick Facts

| Property | Value |
|---|---|
| Term | Advance |
| Language | EN |
| Word count | 135 |
| Last updated | 2026-06-23 |
| Source | https://www.businessdictionary.com/definition/advance.html |

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