The purpose of Advance Funding is to ensure the Agent does not use its own funds to provide for the Principals Operational needs. The Agent has established the below methods of funding to accommodate different Principal needs.
Standard Advance – Proforma estimations are prepared for each Vessel Call and sent to the Principal. The Principal sends funding for each Port Call in advance of the Vessel arrival. The funds are utilized to pay vendors servicing that specific Vessel Call. The advance funds are credited in the FDA thereby reflecting a balance due (To)/From the Principal for the individual Vessel Call. In the event the activities for a Vessel Call change an updated Proforma estimation is sent, and the Principal sends additional funding to cover the expenses.
Standing Advance – An estimation of expenses is prepared and agreed upon with the Principal for DA Billing Time + Principal Payment Terms days of expenses. The Principal sends the funds based upon this estimation and the Agent credits these to the Principals account. The funds are utilized to pay vendors for all Port Calls as they are needed. These funds do not get credited to the individual FDA’s. As the Principal pays FDA’s, the funds are “replenished” thereby keeping the Agent from being in a negative cash position. PDA’s can still be sent on a Vessel-by-Vessel basis as information, but the Principal does not remit funding for the PDA’s.
Monthly Advance – An estimation of expenses is prepared and agreed upon with the Principal based upon 1 month of activity. The Principal sends the funds based upon this estimation and the Agent credits these to the Principals account. The funds are utilized to pay vendors for all Port Calls as they are needed. These funds do not get credited to the individual FDA’s. At the month end closing the Monthly Advance is applied to the FDA’s. The Principal sends a new Advance at the beginning of each month to replenish the Funds. PDA’s can still be sent on a Vessel-by-Vessel basis as information, but the Principal does not remit funding for the PDA’s.