Many businesses will utilize escrow services for various reasons throughout their existence. Usually these services are necessary when a company is making a significant investment or when there is a very long lead time on a project, and both parties want assurances that funds will be available when needed.
Now with COVID-19 disrupting many traditional business practices, there are a few industries that might benefit further from escrow protection. For example, the live entertainment, food service and healthcare industries have been hit especially hard by the pandemic, so how can escrow help with these 3 industries?
1. Business Escrow and Live Entertainment
Many ticket holders have been disappointed to see their events canceled during the past few months. Whether it is sports, live music, a Vegas show or a Broadway performance, it is near impossible for most forms of live entertainment to comply effectively with CDC guidelines. And with ever-changing state and local rules, it can be even more challenging to plan an event during this pandemic. In addition, if the pandemic continues for the long term, many venues and promoters could go bankrupt, and that could leave counterparties at risk of losing their deposits or investments.
One way to continue with planning future events, in a way that maintains some protection for each party, is to utilize a business escrow account. Escrow services can replace up-front deposits or payments that many venues and performers require, and it can help with providing all parties confidence that payments will arrive if the event takes place.
Live events generally involve many months of planning, and with the current uncertainty, many promoters are opting to “wait and see”. However, effective use of escrow can allow both parties to continue with future event planning while allowing for recuperation of costs, should the event need to be cancelled.
2. Protecting Food Service with Business Escrow
Restaurants and bars have been some of the most volatile industries during the pandemic. Often being the first businesses to close and some of the last to be fully reopened, it has been difficult or impossible for many to operate under normal circumstances. Food suppliers and those down the supply chain, like meat processors, were hit particularly hard with outbreaks early in the COVID-19 pandemic. In addition, with closures and restrictions, the future viability of many of these establishments is in question.
Those who manage restaurants can benefit greatly from business escrow. First, escrow can protect against poor quality or outdated deliveries. With stressed supply chains and business closures, uncertainty is rampant in the food production industry. And that uncertainty can lead to lower quality products. With many possible points of disruption in the food supply chain, it may also be beneficial to protect against delayed or missed deliveries.
Food suppliers can also benefit from similar protections. This protection can be extended to their own suppliers and the restaurants they supply. Having the restaurant secure cash in an escrow account prior to delivery can prevent a delay or even loss of payment because of a spontaneous closure or even a failure of the business.
3. Business Escrow Helps Keep Healthcare Workers and Patients Safe
The essential workers that are working hard to keep everyone healthy are at the front lines of the virus. Personal protective equipment (PPE) continues to be in short supply because of disrupted supply chains, and this leaves many in the healthcare industry at risk. And those in elder care are not only putting themselves at risk, but their high-risk patients rely on effective PPE.
Those in healthcare need to be confident that their funds are available in the case of a shortage or delay from a supplier. Hospitals are already experiencing financial stress because of a lack of “non-essential” services, so locking funds into a purchase that doesn’t deliver could delay life-saving care.
Protect Your Investments with Business Escrow by ADM
With the COVID-19 pandemic disrupting the economy, escrow protection has become critical for businesses who are struggling with the uncertainty. And our company, the American Deposit Management Co., has leveraged our proprietary fintech to develop an escrow service that will ensure your funds are secure and growing and competitive rates while they are locked away.
Want to learn more about how ADM can help your business with an escrow account? Visit our Settlement & Escrow page or contact us today.