Glossary · Doing the deal
In short
This is a temporary account held by a neutral third party to hold funds or documents until specific conditions of a transaction are met. As a buyer, it protects your interests during the closing process.
In an acquisition, an escrow account is often used to hold a portion of the purchase price, known as a holdback or earnout, for a period post-closing. This protects you against undisclosed liabilities or ensures the seller meets certain post-closing obligations. Make sure the escrow agreement is clear on release conditions.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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