TRANSACTIONS GLOSSARY
Escrow
Escrow
Funds or documents held by a neutral party until specified conditions are satisfied.
What does Escrow mean?
Funds or documents held by a neutral party until specified conditions are satisfied. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Escrow in context
Taxes and insurance reserves may be held in an escrow account.
Why it matters in financing
Escrow can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related transactions terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.