The lender changed the loan after you guaranteed it.

The demanded debt comes from a loan that changed

A business lender extends a loan term and increases the facility after a director gives a guarantee. The director later receives a demand based on the revised arrangement but recalls signing nothing new. The director assumes the change automatically releases the guarantee. The lender points to clauses in the original documents that it says preserve liability.

Obtain both versions and the change history

Collect the original loan, guarantee, variations, notices and correspondence. Identify changes in amount, term, interest, borrower, security and purpose. Record the dates each change was proposed and implemented.

A simple before-and-after schedule helps the lawyer see the material differences. Do not rely only on the latest facility letter, which may omit earlier terms incorporated by reference.

Check consent and continuing-liability clauses

Locate signatures, electronic approvals and correspondence said to show your consent. Ask the lawyer to explain clauses dealing with variations and ongoing obligations.

The QLS practice note identifies increases and continuing-liability wording as matters to examine. Whether a particular variation affects your liability depends on the documents and applicable law, not a universal rule that all changes release guarantors.

Source: Queensland Law Society — Independent guarantee advice practice note

Reconcile the demand to the changed facility

Ask for the calculation and identify which debt arose before and after the variation. Include payments, fees and security proceeds.

If the lender relies on a new transaction, ask the adviser to examine how it connects to the old guarantee. Keep the factual and calculation questions separate so neither is lost in a broad disagreement.

Avoid adopting new terms without review

Do not sign a fresh confirmation or restructure merely to obtain time before understanding its effect. Keep any formal response dates active while documents are requested.

Once advice is obtained, decide whether to challenge, negotiate or comply on the established position. Retain the complete history so future changes do not recreate the same uncertainty.

Trace the variation before assuming release or continuing liability

Build a dated comparison of the original and varied loan.

Identify consent and clauses dealing with changes.

Get advice before confirming liability under a new arrangement.

Call CRP today to coordinate legal support for a guarantee affected by loan changes.