How Escrow Works When Buying Heavy Power Equipment
High-value used equipment such as gas turbines and generator sets is often sold across borders between parties who have not worked together before. An escrow arrangement is one common way to manage payment risk. This article explains the general concept; it is not legal or financial advice, and the exact arrangement for any purchase should be reviewed by the buyer's own advisers.
About PowerBridge's role
PowerBridge is a listing platform only. It does not own the listed assets. Buyers connect directly with the independent owners, and the transaction terms, including the escrow arrangement, are agreed between buyer and owner.
What escrow is
In an escrow arrangement, the buyer pays the purchase money to a neutral third party (the escrow agent), which holds the funds and releases them to the seller only when conditions agreed in writing by both parties have been met. If the conditions are not met, the funds are handled according to the escrow agreement, for example returned to the buyer.
Typical steps
- Agree the deal terms: price, currency, scope of supply, inspection rights, delivery terms (Incoterms), timeline and what happens if something goes wrong.
- Choose the escrow agent: usually a bank, law firm or licensed escrow company acceptable to both parties. Check that the provider is properly licensed or regulated in its jurisdiction and contact it through independently sourced details, not only links received by email.
- Sign the escrow agreement: it defines the release conditions and the documents that prove each condition (for example an inspection report, a signed acceptance certificate or a bill of lading).
- Buyer funds the escrow account. The agent confirms receipt to both parties.
- Seller performs: allows inspection, prepares and ships the equipment as agreed.
- Release: when the agreed documents are presented, the agent releases funds to the seller, sometimes in stages (for example after inspection and after shipment).
Points to agree in advance
- Clear, objective release conditions and who issues each document.
- Who pays the escrow fees and bank charges.
- Dispute handling: what happens if inspection results differ from the description.
- Compliance checks (know-your-customer, sanctions screening and export controls) that the escrow agent and banks will perform on both parties.
Warning signs
- Pressure to pay a deposit directly to a private account outside the agreed escrow.
- An "escrow company" that cannot be found in public registers or whose contact details differ from its official website.
- Last-minute changes to bank details by email. Confirm any change by phone using a number you sourced independently.
Next: what to check before buying a used gas turbine, or browse all listings.
PowerBridge lists equipment for sale by independent owners. We do not own the assets. Buyers connect directly with independent owners via secure escrow.
