ABC License Transfers: A Simple Guide –
If you’re buying or selling a business with a liquor license in California, you’ve probably heard that you’ll need to use an escrow account. At Secured Trust Escrow, we’ve handled thousands of these transactions, and we’re here to explain exactly how escrow works for ABC license transfers – in plain English.
What is an Escrow Account in ABC License Transfers?
An escrow account is like a neutral “holding tank” for money during a business transaction. When it comes to liquor license transfers in California, here’s how it works:
– The buyer deposits the purchase funds into a secure account managed by a licensed escrow company (that’s us!)
– The seller provides all necessary documents to transfer the ABC license
– The funds stay protected in escrow until EVERYTHING is approved
– Once the California ABC approves the transfer, the money is released to the seller
Think of it as having a trusted referee for your business deal – someone who makes sure everyone plays by the rules before any money changes hands.
Why Escrow is Required for ABC License Transfers
You might wonder why you can’t just hand over a check when buying a liquor license. There are several important reasons escrow is required:
1. State Approval Takes Time – ABC license transfers typically take 30-90 days for approval. Escrow protects both parties during this waiting period.
2. Licenses Are Valuable – A single liquor license in California can be worth anywhere from $10,000 to over $1 million. That’s too much money to exchange without safeguards.
3. Not All Transfers Get Approved – The ABC can deny transfers for various reasons (background issues, zoning problems, etc.). Escrow ensures the buyer gets their money back if the deal falls through.
4. Legal Requirements – California law often requires escrow for these transactions to prevent fraud and ensure proper documentation.
The Step-by-Step Escrow Process for ABC Licenses
At Secured Trust Escrow, we’ve streamlined the process to make it as smooth as possible:
1. Opening Escrow
– Buyer and seller sign an agreement with our escrow company
– We collect all necessary contact and business information
– Our team reviews the purchase agreement terms
2. Depositing Funds
– Buyer deposits the full purchase amount into our secure escrow account
– Funds are held in a federally insured bank account
– We verify all funds are cleared and available
3. Document Collection
– Seller provides all required ABC transfer documents
– We verify all paperwork is complete and accurate
– Our team submits everything to the ABC on your behalf
4. Waiting for Approval
– The California ABC reviews the application (typically 30-90 days)
– We monitor the status and keep both parties updated
– Handle any additional requests from the ABC
5. Closing Escrow
– Once ABC approval is received:
– We notify both buyer and seller
– Release funds to the seller
– Provide closing documents to both parties
– Transfer the license officially changes hands
What Makes Our Escrow Services Different
At Secured Trust Escrow, we don’t just move paperwork – we provide peace of mind:
✅ ABC Specialists – Our team knows liquor license transfers inside and out
✅ Fast Processing – We submit documents within 24 hours of receipt
✅ Transparent Updates – Real-time status tracking for both parties
✅ Secure Funds – All deposits held in FDIC-insured accounts
✅ Error Checking – We review all documents to prevent costly mistakes
Common Questions About ABC License Escrow
Q: How long does the money stay in escrow?
A: Typically 30-90 days, depending on ABC processing times. We can’t release funds until the transfer is officially approved.
Q: What happens if the transfer is denied?
A: The funds are returned to the buyer (minus any non-refundable fees). This is exactly why escrow exists – to protect your money.
Q: Who pays for escrow services?
A: This is negotiable, but typically the buyer and seller split the escrow fees 50/50. Our fees start at $X for standard transfers.
Q: Can we use any escrow company?
A: Technically yes, but you’ll want a company with specific experience in ABC license transfers (like ours). Regular escrow companies often make mistakes that delay the process.
Don’t Risk Your Liquor License Transfer
We’ve seen too many deals go sideways when people try to cut corners with escrow. Remember:
– Without proper escrow, you could lose your entire investment
– The ABC won’t expedite your transfer if documents are incomplete
– One small mistake can add weeks or months to your timeline
At Secured Trust Escrow, we make the process simple, secure, and stress-free. Our team has successfully handled many ABC license transfers across California, and we’re ready to help with yours.
📞 Contact us today for a free consultation and quote. Let’s get your liquor license transfer done right!
