Accommodation Endorsement

Written agreement to be liable made without consideration on a credit instrument (e.g., notes payable) to which another person or firm is a party, thus adding strength to the credit application. An example: a parent company endorses a note of a subsidiary payable to a bank or other lender.

The act of a third person — the accommodation party — in writing his or her name on the back of a commercial paper without any consideration, but merely to benefit the person to whom the paper is payable or to enable the person who made the document — the maker— to obtain money or credit on it.

An accommodation endorsement is a loan of the endorser's credit up to the face amount of the paper.