In a wide range of Supply Contracts, where an Advance Payment is being made, the Client requires an Advance Payment Guarantee. The Provision of this Advance Payment Guarantee normally results in the Supplier being able to have access to the Advance Cash received. CHJ Management has an Innovative Scheme whereby the Advance Cash is made available for Purchases for the Contract without Undue Complications.
There is no surprise in the Current Economic Climate that Commerce is looking for Guarantees and Performance Bonds to increase Levels of Comfort when Awarding Contracts. We are now frequently asked by Clients to Arrange Forms of Payment Guarantees. Sometimes the Underlying Transaction can help alleviate the Stresses of Increased Borrowing to Finance Materials and Manufacturing in Advance of Delivery, often, in a very uncomplicated way. By looking at a Number of Completed Transactions, it has become clear that some Companies are turning to the Transaction before going to the Bank, as an example of this.
A well known Provider of Brand Woven Textiles (carpet or fabric with a logo woven into the cloth) had always taken a small Deposit from the Customer and then financed the Setting Out and Materials from its own Credit Facilities. As Bank borrowing became more difficult and order size increased, the Company changed the Deposit required to 35% of the Final Invoice amount as an Advance Payment. This led to some Confidence Issues in a Competitive Market, to resolve the issue and assure the Security of the Clients Advance Payment. An Advance Payment Guarantee was provided by a Third-Party Surety. The Guarantee allowed Access to the Funds ahead of Production, while providing the Comfort and Protection for the Customers Advanced Cash. The effect on the Manufacturing Company was to reduce Borrowing and ease Cash Flow dramatically. The Company has now introduced a Policy of Advance Payment for all Orders over a Certain Limit. While there is a cost involved, the Risk of Loss from Cancelled Orders is eliminated completely.
CHJ Management arranged these Advance Payment Guarantees. The Surety Company required a Binding Counter Indemnity and the Processes were very Fast and completely Uncomplicated. Since starting to use Advance Payment Guarantees, the Client is more than Satisfied with this new way of Financing Orders and the Level of Service they received from CHJ Management.