Replacing a guarantor is a proposal that needs everyone involved

A replacement signature may not answer your question

Someone offers to take over your guarantee and you expect to be free of the obligation. Before relying on that arrangement, obtain independent legal advice and the creditor's position. A proposal between business owners does not by itself explain what the creditor has accepted or whether the original guarantee remains in place.

Identify the intended transaction

Imagine a departing director whose buyer is willing to provide a personal guarantee for the company's trading account. Record whether the proposal is to add another guarantor, replace the existing one or support a new facility. Those descriptions can lead to different documents. Ask the lawyer to explain what is actually proposed rather than relying on the phrase take over.

Keep advice independent

business.gov.au recommends asking a lawyer to explain contractual wording that is not understood. The replacement person needs to understand their own exposure, and you need advice about your release. Do not treat agreement between the two of you as proof that both positions are protected. The creditor's requirements and the final documents need to be assessed as well.

Source: business.gov.au: Prepare a contract

Show the existing balance and future trading

Provide the current account position and proposed arrangements for later purchases. Ask how the documentation treats existing debt compared with future obligations. In the departing director's example, the supplier may need a clear transition date and complete applications. Do not assume a new account number or a fresh signature automatically determines the treatment of earlier balances.

Coordinate the completion steps

Identify who obtains creditor approval, who supplies documents and what confirmation is needed before the business transaction proceeds. Keep any conditions visible to the advisers handling the sale or departure. Avoid describing the guarantee issue as finished while the creditor is still reviewing the replacement person's application or the proposed release wording.

Confirm each person's final position

Retain the executed documents and ask the respective advisers to explain the outcome. Update personal guarantee records on that basis. A replacement arrangement may be worth discussing, but it should be treated as a documented transaction requiring agreement and review, not a private handover that automatically removes one person's liability when another person volunteers to sign.