Escrow means a neutral third party holds the money until both sides have done what they promised. It's the safest way to sell a company to someone you don't know.
Why use escrow?
- For you: the buyer's money is deposited and secured before you hand over anything. You don't have to trust a check or a promise.
- For the buyer: the money isn't released until you've delivered the company.
We use Escrow.com, a licensed escrow service. You get your own Escrow.com account and can see the status of the funds yourself.
Step by step
- Agreement signed. You and the buyer sign the purchase agreement with the price and terms.
- Escrow opened. The buyer opens a transaction at the escrow service. Both sides review and agree to its terms online.
- Buyer deposits the money. The escrow service confirms the funds are secured. You can check this in your own account.
- Due diligence. The buyer reviews the company's records, liens, insurance and FMCSA history for a set period (ours is 5 calendar days). If something wasn't disclosed, the buyer can cancel and the money is returned from escrow.
- Closing. You sign over the company, the buyer's insurance is filed, and both sides confirm closing.
- You get paid. The escrow service releases the money to you, after paying off any liens directly to the lender.
Holdbacks
Some agreements keep a small part of the price in escrow for a set time after closing (a "holdback"). It covers surprises, like an old bill that shows up later. If no valid claim is made, it's released to you. Your agreement says whether a holdback applies.
Protect yourself from scams
- Only use a well-known, licensed escrow service. Type its web address yourself; never click a link from an unknown email.
- Never sign over the company or share FMCSA portal or Login.gov access before the escrow service confirms the funds are secured.
- Be wary of buyers who want to skip escrow, pay in pieces or "pay after the transfer."
Read next: Selling with factoring or a lien.
This guide is general information, not legal, tax or financial advice. Rules and forms change; check FMCSA and talk to a professional about your situation.