What is an Accommodation Endorsement?

An accommodation endorsement is a written note of acknowledgement that an entity would back another entity for its credit liability. The entity backing the other is more creditworthy. This allows the entity with weaker credit to secure credit from a bank or lender.

Who is an Accommodation Endorser?

An accommodation endorser is a third party or a business that agrees to take responsibility for the credit liability of another party. The endorser gives a promissory note or an acknowledgement paper to a financial institution to back the credit liability of another company – usually a subsidiary or smaller company.