What is it called when you pay for something before it is delivered?

The term for paying for something before it is delivered is best described as advance payment. This term specifically denotes a transaction where funds are transferred to the seller prior to the receipt of goods or services, indicating a forward commitment by the buyer.

Advance payments are common in various sectors, particularly in industries where the delivery of products may take time, such as construction or custom orders. By making an advance payment, buyers may also secure favorable terms or pricing, establishing trust and commitment in business relationships.

Prepayment can be seen as somewhat synonymous with advance payment, but it often refers to a broader range of scenarios, including subscriptions and bill payments made ahead of the due date. Credit payment suggests that the buyer is obtaining the goods or services with the promise to pay later, which contrasts with the concept of paying in advance. Deferred payment allows for payment to be made after delivery, which does not align with the scenario of paying before receiving the goods or services.