{"ok":true,"canonical_url":"https://dealroom.so/glossary/escrow-holdback","api_url":"https://dealroom.so/api/public/glossary/escrow-holdback","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-holdback","term":"Escrow / holdback","aka":"holdback","group":"People and paperwork","definition":"Money parked with a neutral third party after closing to cover surprises, like unpaid taxes or broken promises in the contract.","what_it_means":"An escrow holdback keeps a portion of the seller's proceeds locked up for a defined period after closing — typically six to eighteen months — as security for representations and warranties in the purchase agreement. If a problem surfaces (a hidden tax liability, an undisclosed lawsuit, a key customer who leaves because of the sale), you can make a claim against the holdback instead of suing the seller personally. On SBA deals the escrow structure must be disclosed to the lender.","url":"https://dealroom.so/glossary/escrow-holdback","official_sources":[],"related":[{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"asset-purchase","term":"Asset purchase","url":"https://dealroom.so/glossary/asset-purchase"},{"slug":"change-of-ownership","term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"}],"related_questions":[{"question":"What happens if the seller requires a \"holdback\" of a portion of the purchase price after closing?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-seller-requires-a-holdback-of-a-portion-of-the-purchase-price-after-cl"},{"question":"How does the SBA view a 'holdback' amount from the seller as part of the acquisition agreement?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-view-a-holdback-amount-from-the-seller-as-part-of-the-acquisition-agreeme"}]},"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 / holdback","url":"https://dealroom.so/glossary/escrow-holdback","source_type":"DealRoom Data"}}