China supplier deposit and balance: when to release money

The China supplier deposit is where the risk sits. What 30 percent down and 70 percent against the bill of lading means, what to receive before the balance.

The safest China supplier payment term is not simply 30% deposit, 70% balance.

It is:

30% deposit → production → inspection → problems corrected → 70% balance → shipment.

The percentage matters.

But what must happen before the balance becomes due matters more.

Once you pay the deposit, some of your leverage is gone.

Once you pay the balance, almost all of it is gone.

So agree the payment trigger before sending the first money.

What does 30% deposit, 70% balance mean? #

A common China supplier term is:

30% deposit before production

70% balance before shipment

For example, on a US$20,000 order:

Deposit: US$6,000
Balance: US$14,000

The deposit gives the supplier enough commitment to begin purchasing materials and reserving production capacity.

The exact percentage is negotiable.

Some suppliers ask for:

20/80

30/70

50/50

or milestone payments on complex orders.

There is no Chinese law saying every factory must charge 30%.

Treat 30/70 as a common commercial starting point, not a rule.

Before paying the deposit #

Do not send a deposit because the salesperson says:

“Production slot closing today.”

First confirm:

• supplier identity
• proforma invoice
• product specification
• quantity
• price
• packaging
• production lead time
• payment beneficiary
• inspection arrangement
• balance-payment condition

Your proforma invoice should already be checked before money moves.

For customised goods, keep the final approved specification somewhere permanent.

That may include:

dimensions, materials, colour, logo, packaging, accessories, voltage, plug type, labels and approved sample.

If it is not written down, proving later that the factory made it wrong becomes harder.

Is the deposit refundable? #

Do not assume it is.

Once a factory has purchased custom materials, printed your packaging or started production, recovering a deposit can become difficult even when the order later falls apart.

The actual position depends on your agreement and why the order was cancelled.

So before paying, ask:

What happens to the deposit if production cannot meet the agreed specification or deadline?

Put important cancellation and refund terms in writing.

The safest meaning of “70% before shipment” #

“Before shipment” is too vague by itself.

You want it to mean:

after production is complete and after the goods have passed the agreed inspection.

Not:

when the supplier tells you the goods are ready.

A better term is:

70% balance payable after successful pre-shipment inspection and correction of any material non-conformities, before shipment.

Now there is an event you can verify.

Inspect before paying the balance #

This is the main rule.

Do not pay the final 70% because the supplier sends five attractive photos.

Those photographs may show five good units from an order of 10,000.

A proper pre-shipment inspection can check things such as:

• quantity
• model
• colour
• dimensions
• basic function
• workmanship
• accessories
• labels
• retail packaging
• carton markings
• carton quantity

For serious orders, use someone who answers to you, not the supplier.

Our China quality inspection guide explains the inspection options.

What should you receive before releasing the balance? #

At minimum:

1. Final packing list

Check quantities, cartons and weights.

2. Photos/videos of the completed order

Useful, but not a replacement for inspection.

3. Inspection report

For orders where quality risk justifies one.

4. Confirmation that inspection failures were corrected

Do not accept:

“We will fix those ones after payment.”

Verify the correction first.

5. Final shipping details

Know where the cargo is going and who is collecting it.

Then release the balance according to the agreed term.

What does “70% against copy of bill of lading” mean? #

This is different.

Under this term:

the supplier ships first

then sends you a copy of the bill of lading,

and you pay the balance after seeing evidence that the cargo has been shipped.

That gives you more time before releasing the money.

But it does not solve the quality problem.

By then the goods may already be inside a container and at sea.

If you discover that 30% of the order is defective, correcting it becomes much harder.

So even with:

70% against copy B/L

inspect before loading where quality matters.

Does the supplier always control the cargo until you pay? #

Not necessarily.

It depends on the transport document and release method.

With an original negotiable bill of lading, possession/control of the originals can be important for obtaining the cargo.

But shipments can also use:

• telex release
• surrendered bill
• sea waybill
• other release arrangements

A PDF marked COPY does not by itself tell you who controls release of the goods.

Ask your freight forwarder how the bill of lading will be issued before agreeing to a payment term built around it.

Before shipment or against bill of lading: which is safer? #

For quality control, paying after inspection but before shipment is cleaner because problems can still be corrected at the factory.

For cash flow, payment against shipment documents may let you hold your cash longer.

Neither replaces supplier verification.

For a new supplier, the more important protection is:

do not release the large balance before independently confirming what was produced.

As the supplier proves itself over repeated orders, better payment terms may become negotiable.

The Nigerian 30% advance-payment rule changed in 2026 #

This is especially useful for Nigerian importers.

The Central Bank of Nigeria launched the Fourth Edition of its Foreign Exchange Manual on 15 May 2026, with implementation from 1 June 2026.

One of the important changes was an increase in the allowable advance payment for physical imports from:

15% to 30% of FOB value.

That fits much better with the common 30% deposit requested by Chinese manufacturers.

So on a formal Nigerian import processed through the banking system, a standard 30% pre-shipment deposit now sits within the current CBN advance-payment threshold.

What if the supplier wants 50% upfront? #

Negotiate.

The commercial issue is that you are transferring more risk to yourself before the goods exist.

There is also a Nigerian banking issue.

The current CBN allowable advance-payment threshold for physical imports is 30% of FOB value.

So if your Chinese supplier insists on 50% before shipment, speak to your bank's trade desk before agreeing to it.

Do not promise the supplier a payment structure first and then discover that your formal import-payment route cannot process it in that form.

Do not pay 100% upfront just for a discount #

A supplier may offer:

“2% discount if you pay full amount now.”

Do the maths.

You are accepting almost the entire production and performance risk to save 2%.

For a new supplier and a meaningful commercial order, that is usually a poor exchange of risk.

Price is not the only thing being negotiated.

Payment terms are part of the price.

Check the beneficiary every time money moves #

Before the deposit:

verify the beneficiary.

Before the balance:

verify it again.

Changed bank details are a classic payment-fraud point.

If the supplier suddenly writes:

“Our old account has a problem. Pay this new company instead.”

stop.

Do not send the money because the message came from the same email or WeChat account.

Confirm through another known channel.

What if the payment account belongs to another company? #

That is not automatically fraud.

Chinese factories sometimes legitimately receive export payments through:

• affiliated trading companies
• export companies
• Hong Kong entities
• authorised payment agents

But you need to understand why.

Ask for documentation connecting the beneficiary to the supplier and transaction.

The more complicated the payment chain becomes, the more verification you need.

Read our Chinese supplier payment scam guide before changing any beneficiary.

What if the supplier is late? #

Do not reward delay by giving away your remaining leverage.

If the goods were due on 1 September and are still unfinished on 20 September, do not pay the 70% because the salesperson says:

“Send balance today so we can finish faster.”

First establish:

What is finished?

What is missing?

Why is production late?

When can it be inspected?

Then decide what happens under the agreement.

Paying the balance does not make an unfinished order finished.

When is a Letter of Credit worth considering? #

For a larger transaction, an LC — Letter of Credit — can give both sides more structure.

Your bank issues an undertaking to pay the supplier when the supplier presents the documents required by the LC and those documents comply with its terms.

That reassures the supplier that payment is backed by a bank.

It also means payment can be tied to specified documentary evidence.

But understand what an LC protects.

Under the international UCP 600 rules used for documentary credits:

banks deal with documents, not the goods themselves.

A perfect-looking document set does not prove every product inside the container is perfect.

If you want inspection protection in an LC, write it into the LC #

Suppose you want the goods inspected before payment.

The LC can require an:

inspection certificate issued by an agreed independent inspection company.

Now the bank can check whether that required document was presented.

Without that condition, the bank is not going to open the container and test your products.

ICC guidance specifically stresses that banks examine documentary compliance rather than the underlying goods.

This distinction matters.

When does an LC make sense? #

Consider discussing one with your bank when:

• the order is large enough to justify bank fees
• you and the supplier are still building trust
• the supplier wants stronger payment security
• the transaction needs structured documentary control
• you are buying equipment or other high-value goods
• your bank is willing to support the transaction

For a few cartons of samples, an LC may be unnecessary complexity.

For a major machinery or container order, it may be worth asking.

Get the bank's:

fees + collateral requirement + FX arrangement + processing time + document requirements

before offering LC terms to the supplier.

Three payment mistakes that matter #

Paying before verifying the supplier #

The best payment term cannot rescue money sent to the wrong company.

Verify first.

Paying the balance before inspection #

The unpaid balance is your strongest commercial leverage.

Use it.

Agreeing the percentage but not the trigger #

30/70 tells you how much.

It does not tell you when.

Write the trigger.

A cleaner payment term #

For a normal manufactured order, something along these lines is much stronger:

30% deposit after PI approval and supplier verification.

Production lead time: X days from receipt of deposit.

Independent pre-shipment inspection when production is complete and goods are substantially packed.

Supplier corrects material inspection failures before balance payment.

70% balance payable within X working days after passed inspection.

Shipment/loading follows balance according to the agreed Incoterm.

For container orders, add a loading check where the risk justifies it.

The exact wording should fit the product and transaction.

The important thing is that the payment is tied to something you can verify.

The rule to remember #

Do not focus only on:

“How much deposit?”

Ask:

“What must the supplier complete before the next payment becomes due?”

That question protects you much better.

For most China orders, your safest sequence is:

verify supplier → approve PI → pay deposit → monitor production → inspect → correct problems → pay balance → ship.

Once the balance is gone, fixing a problem becomes negotiation.

Before the balance is gone, fixing it can still be a condition of payment.

Next, check the proforma invoice from your China supplier.

Then read how to inspect goods in China before shipment.

And if you are paying through Nigeria's formal banking system, use our Form M guide before agreeing the payment schedule with the supplier.

First published 20 Sep 2026. Last checked 23 Sep 2026 by The ChinaBridge desk. Something here out of date? Tell us in the comments and we will fix it.