Unsecured Line of Credit The unsecured line of credit is a financial instrument that allows businesses to use financing without having to resort to collateral such as a company vehicle, office equipment, or office space. Businesses with cash flow problems use lines of credit in most cases. In other words, less cash is coming in compared to what is coming out of the business. Many new enterprises encounter this problem at some point. The need for cash may arise unexpectedly; so, it is important to ensure that the company meets the requirements for receiving an unsecured line of credit. As a first step, the owner of the enterprise has to put some effort into making sure the business establishes a good business score. With that achieved, it is unlikely that the business gets turned down when applying for a line of credit. Given that this line of credit is unsecured, the lending company takes more risk and thus requires a positive credit history. The latter functions in the same way as one’s personal credit score. With regard to benefits, the unsecured line of credit is a good solution for making timely payments to vendors and avoiding penalties, increasing the business’s marketing initiatives, and making the payroll on time. The unsecured personal line of credit represents an agreement between a borrower and financial institution to lend money up to a specified minimum. Interest is charged but only on the amount that is withdrawn from the credit line. Some of the providers require that borrowers keep a balance of ten or more percent of the line of credit. With unsecured lines, lenders do not hold any property of the borrowers as collateral. The credit rates offered by various financial institutions in Canada vary depending on a variety of factors, including borrowing and repayment history, credit worthiness, and the extent to which a particular borrower uses other services and products of the provider. To get a general idea, the Bank of Nova Scotia offers unsecured lines of credit with a credit limit in the range of $5000 and $50,000. Beneficial features that come with the credit line are free personalized checks, ScotiaLine Protection, interest rate equal to the Scotiabank Prime Rate of 3 percent + 1 percent, itemized statement, and custom checks. The personal line of credit can be used to purchase a RV or a car, renovate one’s home, pay off high interest rate loans, or make an investment. The RBC also offers unsecured personal lines of credit with a credit limit between $5000 and $50,000 and interest rate based on one’s credit history. The credit line can be used for a variety of purposes such as paying off debts, home renovations, covering daily expenses, and others. Even if a client does not need to borrow immediately, he or she can be assured that the money is available in case of unplanned expenses or emergencies. Customers enjoy quick and easy application process and can apply at a local branch or over the Internet.