Irrevocable Letter Of Credit - ILOC

See: Letter of Credit.

When the bottom line is signed, the credit, in its full amount, in the specified contractual terms, with all the indenture details...is yours. The bank can't take it back.

And why is this even a Thing? Like...wouldn't most letters of credit be more binding than oatmeal?

Well, they're usually not, actually. Banks like keeping the option of saying to an LOC person, "Hey. We like you. Really. But um, that dough we're giving you the option to borrow at any time in the next year for 5 years max at 6%? Yeah, that. It's not on the table anymore. Sorry."

And why would a bank do this? Eh, lots of reasons. They might not like the macro environment, like believing the commercial climate is about to get awful...or the opposite: they believe it's going to get great and they'll be able to write similar LOCs for 8% or 9% interest if they wait a few months. Or the bank itself is going through management upheaval. Or M1 supply is just kinda weak. Or they just don't wanna.

So that irrevocable factor...matters.