Financial escrow is used extensively for business and other transactions involving asset sales. The buyer places the funds with us and the seller provides the asset to the buyer. When the asset is confirmed to be valid we release the funds to the seller. 

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WHEN IT MATTERS

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If your company is buying or selling high-value assets or services then financial escrow is a good way to protect the buyer and seller across the whole transaction.​

 

Delay in transfer of item

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There has always been a certain amount of risk involved when an item of high-value is being shipped or transported to a buyer's destination. This mostly refers to the rare but possible scenario that the seller may not send the item that has already been paid for, but keeps the money anyway, or a buyer receives the item and does not pay for it. 

 

With a Financial Escrow agreement put in place prior to the transaction, it allows the Buyer to deposit the funds with the Escrow Agent and when the item is received by the Buyer the Escrow Agent releases the funds to the Seller, assuring that the transaction is fulfilled by both parties.

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Delay between provision of services and payment

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When a service provider delivers high-value services there is a risk that the buyer will not pay the services provider (Seller) even though the service may already have been provided. A Financial Escrow may include part or milestone payments if the service is provided over longer periods.

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Quality of goods and services

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In some cases the item or service must meet certain pre-agreed quality standards. In such situation, an Escrow Agreement can be put in place to ensure the item or service is at the standard stipulated by the Seller. If the item or service does not meet that standard then payment can be withheld until the quality issue has been corrected.

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The role of the Escrow Agent is to execute the payment contains exactly as defined by the Buyer and Seller subject to agreement that all specified conditions have been met prior to payments.

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These are some scenarios where financial escrow could be beneficial.