The party that lends the money on t

The party that lends the money on the guarantee of a promissory note is the original payee of that note; the individual or party in possession of the note -- usually the same -- is the holder. A payee may treat the note as another financial asset, such as a stock or bond, which he can transfer or sell to another party. In order to transfer the note, however, the payee must endorse it. An endorsement is a signature in which the payee makes a third party the new payee, who thus receives the right to collect from the maker and any co-maker. If no party is named as the new payee, the endorsement makes the note a bearer instrument. This means the holder, whoever he may be, becomes the payee. Notes can be endorsed multiple times, and the right to receive repayments can be split among multiple payees by terms included in or appended to the note.