Escrow
A neutral third-party account that holds money during a deal — so neither side can grab it if things go sideways.
Escrow is a holding account managed by a neutral third party — usually a bank, an attorney, or a specialized escrow company. Money goes into the account, sits there, and only releases when specific conditions in the purchase agreement are met. In a business sale, escrow shows up in two main places: as the home for any holdback portion of your sale price (sitting safely until the holdback period ends), and as the place where the buyer's funds sit before closing while final paperwork gets signed. The whole point is that nobody can touch the money until the rules of the agreement are satisfied.
Escrow is where part of your sale price sits during the holdback period — and whether it's in true escrow or in the buyer's hands changes everything if a dispute happens.
Buyers prefer holding the money themselves; sellers prefer true third-party escrow.
Find out what a buyer would see in your business — before you talk to one.
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