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Firm without enough cash to meet its current needs and obligations. Illiquidity is one of the major causes of business failure because a firm can survive without profit for a while but not without cash. Even firms rich in fixed assets (land, buildings, machinery) become insolvent from want of cash because it takes time to convert these assets into cash, and that too usually at a loss in value.

Use 'illiquid' in a Sentence

The company wished to dissolve some of its property holdings for cash to pay its debts, as it had become illiquid.
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Due to our recent failures which caused this illiquid state we are currently in, I'm afraid that we're going to have to declare bankruptcy gentlemen.
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While technically profitable, the company was forced into bankruptcy as the rate of revenue collections outpaced its collections leaving it illiquid.
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