Unrestricted cash refers to cash that is readily available to be spent for any purpose and has not been pledged as collateral for a debt obligation or other purpose.

Often, to satisfy debt covenants, companies must maintain a certain level of cash on their balance sheets in case the company defaults or goes into nonpayment of their credit obligations.

The remaining cash that exceeds the covenant requirements is referred to as unrestricted cash. Unrestricted cash is a part of an organization's liquid funds, meaning it's easily accessible.