Accommodation endorsement

An accommodation endorsement is a written acknowledgement that an entity will be liable for an obligation. The entity enters into this commitment despite not receiving any consideration. For example, a corporate parent acknowledges that it will pay a loan if the subsidiary applying for the loan is unable to pay it. Or, a parent guarantees the lease payments of a child, so that the child can enter into a lease agreement for an apartment. As a result, the creditworthiness of the party receiving this benefit is enhanced.