Tenant credit protection

Tenant Credit Protection is a financial term in the real estate leasing industry, referring to third-party financial support for tenants' obligations under a real estate lease. A landlord that enters into a long-term lease with a tenant GeneRally requires that the tenant provide a deposit, stand-by bank letter of credit, or third party guarantee of a portion of the rent due under the lease, to attempt to protect the landlord against the non-payment of rent (or other obligations) under the lease. In the event of the tenant's bankruptcy during the term of the lease, the landlord is an unsecured creditor of the tenant, with limited recourse against the tenant's assets under U.S. bankruptcy laws. As a result of the financial crisis beginning in 2008, landlords have been searching for safe, third-party credit support for tenants' lease obligations to protect against losses due to bankruptcy of tenants.

To date, only one company, Finex Trading, LLC, provides "tenant credit protection" to commercial landlords. Its proprietary trade credit product provides landlords the right to sell their lease claims to large commercial credit companies for a pre-determined amount, in the event of the bankruptcy or insolvency of the tenant.