An industrial escrow account may be regarded as similar to commercial escrow, in that it is a generic term which can be covered in many areas.
Today much of our trading is international, and it can mean trading codes are varied and complex.
Perhaps companies find themselves selling or buying equipment or parts from companies with whom they have no trading record, and have never met.
Letters of Credit can be both expensive and very time-consuming.
In the case of industrial technology or large scale production plant, the risk is not simply financial but could also be vital to the continuity of your entire production processes.
Manufacturing companies for example maybe commissioned to make parts and may be expected to ship at regular intervals with agreed payment terms in place.
Second-hand machinery carries equal risk, albeit that the capital sums may be less.
Site visits to the sellers place of business seeing the machine working still does not guarantee that damage will not occur in transit or that the machine will function perfectly after re-commissioning.
Equally for the seller, the risk may be that the buyer fails to meet the latter stage payments or simply no longer has the funds available.
Escrow accounts may help to mitigate some of the risk
With funds lodged within an escrow account by a regulated and independent third –party, disbursements will only be paid once the parties agree that clause conditions have been met.