Accommodation Endorsement Definition
An accommodation endorsement is a written note of acknowledgement that an entity would back another entity for its credit liability. This is an agreement that a business would be held liable for the credit of another business, usually, a stronger company with financial strength backs a weaker company.
The entity backing the other must be creditworthy as this is the only way the weaker entity can secure credit from a bank or lender. A company with a poor credit rating cannot be an accommodation endorser to a subsidiary or the other entity that is in need of credit.
A Little More on What is an Accommodation Endorsement
Accommodation endorsement is not only done in corporate setting by companies, individuals also engage in accommodation endorsement. For instance, a millennial who needs to purchase a car for an internship but only has a part-time job and no credit history will need someone with creditworthiness to engage in a loan co-signing agreement before he can secure a loan.
Loan co-signing agreements are similar to accommodation endorsements. A parent company can agree to back the credit liability of a subsidiary company. A company acting as an accommodation endorser must have a good credit history and enough assets to take on the credit liability of the other company of it defaults. The company backing the other agrees to pay back a loan if the weaker entity defaults payment.
Examples of an Accommodation Endorsement
Any company and not necessarily a parent company can back another company up in credit arrangements. However, there must be some level of trust that the company has in the smaller company before it can stand in as an accommodation endorser. This is because, the endorser accrues all credit liabilities of the other company defaults.
Usually, an accommodation endorser receives no payment for their service, they simply back the credit liability of a smaller company based on trust. Examples of accommodation endorsement include instances where a national bank backed up the credit liability of its regional subsidiaries and a soda company backing its bottling company.
Reference for “Accommodation Endorsement”
Academics research on “Accommodation Endorsement”
Accommodation or Endorsement-Stark v. Independent School District: Caught in the Tangle of Establishment Clause Chaos, Huleatt, J. W. (1998). Accommodation or Endorsement-Stark v. Independent School District: Caught in the Tangle of Establishment Clause Chaos. . John’s L. Rev., 72, 657.
Reasons for going green in serviced accommodation establishments, Tzschentke, N., Kirk, D., & Lynch, P. A. (2004). Reasons for going green in serviced accommodation establishments. International journal of contemporary hospitality management, 16(2), 116-124. This paper reports on the preliminary findings of an exploratory study on environmental decision making in the context of largely small serviced accommodation establishments. It focuses on the motivations of owner‐managers for becoming environmentally involved and their reasons for joining an environmental accreditation scheme. The study was conducted in Scotland using face‐to‐face in‐depth interviews with members of the Green Tourism Business Scheme, an environmental accreditation scheme for tourism businesses. Initial analysis suggests that involvement in environmental activities may be driven by economic as well as ethical considerations. The results point to the role played by personal values and beliefs in small firms’ decision making and the need to gain a greater understanding of the complexity of motives that drive the small hospitality business owner.
Legal Considerations in Using Arbitration Clauses to Resolve Future Problems Which May Arise During Long-Term Business Agreements, Aksen, G. (1972). Legal Considerations in Using Arbitration Clauses to Resolve Future Problems Which May Arise During Long-Term Business Agreements. Bus. Law., 28, 595.
An overview of the field of family business studies: Current status and directions for the future, Sharma, P. (2004). An overview of the field of family business studies: Current status and directions for the future. Family business review, 17(1), 1-36. Based on a review of 217 refereed articles on family business studies, the literature is organized according to its focus on individual, interpersonal or group, organizational, and societal levels of analyses. An assessment of the status of our current understanding at each level is provided and directions for future research are suggested. A discussion of definitional issues, bases of distinctiveness, and family firm performance is used to help understand the domain or scope of the field. Methodological issues and strategies aimed to enhance the pace at which the field achieves a distinctive legitimate place in organizational studies are presented.
Cost and effectiveness of accommodations in the workplace: Preliminary results of a nationwide study, Hendricks, D. J., Batiste, L. C., Hirsh, A., Schartz, H., & Blanck, P. (2005). Cost and effectiveness of accommodations in the workplace: Preliminary results of a nationwide study. Disability Studies Quarterly, 25(4). This article provides a description and brief history of the Job Accommodation Network (JAN), a project funded by the U.S. Department of Labor’s Office of Disability Employment Policy. Preliminary results from JAN’s customer satisfaction survey are presented. At present, 778 employers and 882 individuals with disabilities have been interviewed. The findings to date indicate that a broad spectrum of business types use JAN’s services. JAN customers reported that implementation of worksite accommodations would significantly reduce the individual’s level of limitation due to the disability. Importantly, JAN customers reported having made highly effective accommodations at very little or no cost. Employers who were interviewed said slightly over half (50.5%) of the accommodations they implemented following discussion with JAN had been at no cost. For those employers who did experience some cost, the median dollar value was $600