A term used in the financial industry to mean credit support or backup funds for a financial instrument or transaction.

For example, bank revolving credit loans are often obtained to backstop commercial paper in the event that the commercial paper issuer defaults on its payments. This backstop facility supports the commercial paper's credit rating and fosters investor confidence since it provides a secondary source of repayment for the commercial paper. For more information on commercial paper programs, see Practice Note, US Commercial Paper Programs: Overview.

New letters of credit may be issued to backstop outstanding letters of credit that were issued under a bank loan facility that is being refinanced or terminated. For more information on letters of credit, see Practice Note, Letter of Credit Migration.