Advance Payments

Our Advance Payment facility is a method of payment that favours the exporter, as the goods are only shipped (or in some cases manufactured) once payment has been received from the buyer (importer).

Why do I need this? The buyer pays the seller before the goods have been shipped, or in some cases before the goods
have been manufactured

Payment can be effected by bank draft or electronic payment (SWIFT).

What else do I need to know?

This method of payment favours the exporter, as the goods are only shipped (or in some cases manufactured) once payment has been received from the buyer (importer).

What do I need to do?

If you are exporting:

On conclusion of the contact of sale, the buyer sends you advance payment Your bank will receive an inward transfer in your favour You will need to supply your bank with the appropriate settlement instructions, as well as You ship the goods and forward the documents to the buyer

conversion instructions if the transfer is in foreign currency

If you are importing:

The contract of sale is concluded Contact our International Business Centre and request them to do a SWIFT transfer or issue you You will need to supply the International Business Centre with details of the beneficiary (including On receipt of the goods and documents, you clear the goods

with a draft banking details, amount and currency) and a copy of your invoice

What are the risks? The seller's country may impose laws that prevent the shipment from taking place

The seller may not ship the right quality and/or quantity of goods, or he/she may not ship at all The buyer's country may not allow advance payments in respect of imported goods The buyer's cash flow may not allow for payment to be made. It can cost the seller dearly as he/she

may have incurred manufacturing and other costs on the understanding that an advance payment would be forthcoming

How can these risks be minimised? Bank/Status reports can be obtained to ascertain the reliability and integrity of the seller

Country reports are useful in determining the stability of the seller's country If the seller will be incurring costs to either manufacture or secure the goods from another supplier, The buyer may request the seller to issue an Advance Payment Guarantee covering any monies

reports should be obtained on the buyer and the buyer's country advanced to the seller, should the seller default

When should I use this method of settling my international trade transaction?

This method of payment favours the exporter as he/she only ships or manufactures the goods once payment has been received from the buyer. The buyer, therefore, runs the risk of paying for goods that may never arrive, or not be in accordance with the order.

I want it!
Give us a call on +264 61 299 2222.

Contact Details
Give us a call on +264 61 299 2222. For queries pertaining to importers in particular, contact our International Business Centre: Private Bag 13239 Tel: +264 61 299 2040 Fax: +264 61 299 2125 ibc@fnbnamibia.com.na