Definition Of


Prepayment is paying for goods at the time the order is placed and prior to receipt of the goods.

When prepaying, the importer carries all the risk. They are placing implicit faith in the supplier to fulfil the terms of the contract.

Prepayment is the payment of the principal amount of a loan ahead of the scheduled date.

Share it:

More from this Section

  • Futures
    Futures Contracts to buy something in the future at a price agreed upon in advance. First developed in the agriculture commodity markets but
  • Liquidity
    Liquidity is the ability to sell a business or other asset quickly at a price that is close to its market value; also, a company’s ability to meet its short-term financial obligations.
    UNCITRAL means United Nations Commission on International Trade Law – UN agency based in Vienna, specialising in the development of
  • Covering
    Covering refers to a transaction in the forward foreign exchange market or money market that protects the value of future cash flows. Covering is another term for hedging.
  • Monetary assets or liabilities
    Monetary assets or liabilities refer to assets in the form of cash or claims (such as accounts receivable), or liabilities payable in cash. Monetary assets ...
  • Grossing up
    Grossing up refers to the policy of a parent corporation that takes the full before-tax foreign income of a foreign corporation— apportioned by its proportional ...
  • Shipper
    Shipper is the party (exporter or importer) who enters into a contract of carriage for the international transport of goods.