Advance Funding

DEFINITION of 'Advance Funding'

This refers to any advance made on a future commitment or payment. The term, advance funding, is used very broadly, ranging from personal or project loans, future contractual payments like annuities or royalties and government appropriations.

BREAKING DOWN 'Advance Funding'

Some examples of advance funding are: payday loans, viatical settlements and lawsuit settlement advances. Usually advance funding would involve an assignment of the contract or series of payments due in the future, or waiver of the amount of those payments sufficient to repay the advance. In most cases, the advance funding will be discounted for some imputed amount of interest.

RELATED TERMS
  1. Advance Payment

    Any type of payment that is made ahead of its normal schedule, ...
  2. Future Advance

    A clause in a mortgage which enables the lender to advance funds ...
  3. Annuity In Advance

    An amount of money that is regularly paid at the beginning of ...
  4. Advance Commitment

    A promise or agreement to take some future action. For example, ...
  5. Deferred Payment Annuity

    An annuity where the payments received will start some time in ...
  6. Annuity Due

    An annuity whose payment is to be made immediately, rather than ...
Related Articles
  1. Personal Finance

    Before You Take That Cash Advance

    Understand who benefits most from cash advances – and when it might make sense to get one.
  2. Personal Finance

    8 Quick-Cash Alternatives To Credit Card Advances

    Sometimes you can find a better deal than a cash advance – but some alternatives are even more pricey. Where to find the cheapest source of quick cash.
  3. Markets

    The Foundation Of Structured Settlements

    This annuitized payment setup should be arranged through impartial attorneys and tax agents.
  4. Managing Wealth

    How to Calculate the Value of Annuities

    Here's everything you need to account for when calculating the present and future value of annuities.
  5. Markets

    The Best Alternatives to Payday Loans

    There are better ways to handle a financial emergency between paychecks, including the 12 described here.
  6. Personal Finance

    The 4 Worst Reasons For A Cash Advance

    They're convenient, especially in an emergency. But that's about the only good thing you can say about taking a cash advance. Here's why.
  7. Financial Advisor

    Pension Advances: What You Should Be Wary Of

    The terms some pension advance firms require can be costly. Here's how to be sure your clients aren't making bad decisions.
  8. Retirement

    Are Annuities Retirement-Only Investments?

    Learn more about why annuities are generally purchased and the way that they can positively and negatively affect an individual preparing for retirement.
  9. Retirement

    Beware Of Taking Out A Pension Advance Loan

    Avoid taking out an advance against your pension. Interest on these loans is high and you could end up taking a huge tax hit – and even lose your pension!
  10. Financial Advisor

    Advising FAs: Explaining Annuities to a Client

    Conceptually speaking, annuities can be thought of as a reverse form of life insurance.
RELATED FAQS
  1. What are the differences between payday loans and cash advances?

    Learn how to differentiate between payday loans and cash advances, identify what risks are associated with each, and find ... Read Answer >>
  2. What are the different types of cash advances?

    Find out the different types of cash advances along with their different features to determine which option, if any, is best ... Read Answer >>
  3. How does interest work on a cash advance from my credit card?

    Find out how cash advances and regular credit card purchases are treated differently and what it means for your financial ... Read Answer >>
  4. What is the difference between the present value of an annuity and the future value ...

    Find out about the difference between the future value and present value of a fixed annuity, including how to use these calculations ... Read Answer >>
  5. For what types of financial instruments would I want to calculate the present value ...

    Learn about the types of financial instruments the present value of an annuity calculation is most useful for, including ... Read Answer >>
  6. What is an annuity?

    An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center