Holdback
Money the buyer keeps from your sale price for a set period — in case something goes wrong after closing.
A holdback is a portion of the purchase price the buyer doesn't pay you at closing. Instead, they keep it (or place it in a third-party escrow account) for a set period — typically 12 to 24 months — to cover any problems that surface after the deal closes. Common reasons: a customer claim that wasn't disclosed, a tax issue from before the sale, a working capital adjustment that didn't go the seller's way, a lawsuit you didn't know was coming. If nothing goes wrong, the money releases to you when the holdback period ends. If something does, the buyer pulls from the holdback first before they have to come after you personally.
A holdback is money you sold the business for but won't see for 12–24 months — and might not see in full if something surfaces post-close. Whether the deal is six figures or nine, holdbacks are standard.
Buyers see holdbacks as basic risk insurance against problems that surface after closing.
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