Guaranty Release Burn Off Calculator

Guaranties burn off over time. This calculator projects schedule.

Initial guaranty

Burn-off years

Burn-off per year %

Current year

Remaining guaranty

$240,000

Burned off to date

$240,000

Yearly burn amount

$120,000

How the math works

Burned % = burn-per-year × current year (capped at 100%). Remaining = initial × (1 − burned %).

On $480k initial with 25%/yr burn-off in year 2: $240k remaining, $120k/yr burn rate. After year 4, fully released. Burn-off trades short-term protection for long-term tenant commitment — fair exchange in most markets.

How to Use

Enter initial guaranty amount.
Enter burn-off years.
Enter burn-off per year %.
Enter current year.
Read remaining guaranty.

Frequently Asked Questions

Burn-off mechanics?

Starting guaranty (e.g., 100% of first-year rent). Each anniversary of strong payment, reduces by X% (e.g., 25%). After 4 years, fully released. Triggers: no defaults, no late payments above threshold, no material adverse change in tenant business.

Reset on default?

If tenant defaults during burn-off period, landlord can reset guaranty back to full (rare) or suspend further burn-off. Lease language varies. Sophisticated tenant: 'cure and continue' to preserve burn-off schedule.

Market practice?

Class A office: 12-24 month burn-off common for credit tenants. Industrial: longer (3-5 years). Retail: often no burn-off (stays through term). Restaurant: 5+ years with partial reduction. Landlord accepts burn-off when tenant has real growth trajectory.