What Is an Irrevocable Letter of Credit (ILOC)?
An irrevocable letter of credit (ILOC) is a prearranged account from a lender that will guarantee payment for services or product delivered. The parties of an ILOC are the buyer, seller and lender. It guarantees the delivery of funds to the seller.
An ILOC cannot be cancelled or modified except when all parties agree. When payment in full is made by the buyer and both parties notify the lender that the payment is made and services or product is receive, the ILOC may be cancelled when lender rescinds the official letter with another.