Holdback
A portion of the price held in escrow after closing to cover indemnity claims, working-capital true-ups, or missing items.
Last updated September 5, 2026
A holdback (or escrow holdback) protects the buyer if representations fail, inventory is short, or a stated condition is not met. The purchase agreement sets the amount, duration, claim procedure, and who gets the interest. It is different from an earnout, which is contingent compensation, and from a seller note, which is scheduled debt. Unused holdbacks are typically released to the seller when the period ends.