{"ok":true,"canonical_url":"https://dealroom.so/glossary/escrow","api_url":"https://dealroom.so/api/public/glossary/escrow","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"escrow","term":"Escrow","group":"Doing the deal","definition":"A financial arrangement where a third party holds funds or assets on behalf of two other parties until specific conditions are met. This protects both buyer and seller by ensuring funds are released only when agreed-upon terms are satisfied.","what_it_means":"In a business acquisition, an escrow account is often used for a portion of the purchase price, especially if there's an earnout or a need to secure seller indemnities for a period post-closing. Funds are released from escrow based on milestones or after a set timeframe, providing security against unforeseen liabilities or performance issues.","url":"https://dealroom.so/glossary/escrow","official_sources":[],"related":[{"slug":"earnout","term":"Earnout","url":"https://dealroom.so/glossary/earnout"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"nda-buyer-verification","term":"NDA","url":"https://dealroom.so/glossary/nda-buyer-verification"}],"related_questions":[]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Escrow","url":"https://dealroom.so/glossary/escrow","source_type":"DealRoom Data"}}