In finance, advance means to pay beforehand. Paying anything or anyone in advance is used in business transactions and also in workplaces.
In the workplace, getting a cash advance means getting paid before a service is rendered. Cash advances differ from salary loans because interest is not paid for getting a cash advance.
Not all companies give cash advance to employees. Salary loans are a more common option.
There are all kinds of business transactions wherein paying in advance is the norm. One of the industries that practice a kind advance pay arrangement is the publishing industry. Authors are paid for the rights to publish their work before the book is even published. The author also gets royalty or commission for every book that is sold. The payment for the right to publish the book is called an advance because they payment is made before any sales are made. The amount given to authors in advance varies greatly depending on the author’s popularity/reputation.
Another example of advance payments made in business transactions is having a client pay a partial amount of the agreed total contract price. Sometimes the advance payment is put in an escrow account, with the money only to be released after a product or the service is delivered in full.
