What type of endorsement limits the use of funds to a specific purpose?

The correct choice involves a restrictive endorsement, which is specifically designed to limit the use of funds to a certain purpose. When a check has a restrictive endorsement, it often includes instructions that outline how the check can be used. For example, it may state "for deposit only" or specify that the funds should be used for a designated expense. This ensures that the money can only be utilized in the manner explicitly stated in the endorsement, providing a layer of security and specification for the intended use of the funds.

The other options do not achieve the same purpose. A blank endorsement is simply a signature on the back of the check, allowing for transferability without restricting its use. A conditional endorsement includes a condition that must be met for the check to be cashed, but it does not limit the funds to a specific purpose. A commercial endorsement is typically related to endorsements made in connection with business transactions and does not inherently impose restrictions on the use of funds. Thus, a restrictive endorsement clearly stands out as the option that explicitly limits how funds are to be used.