Bankruptcy Risk

The likelihood an organization or company will become insolvent due to inability to pay its debts or financial obligations.

In layman's terms, it's (generally speaking) how likely a business is to fail. Various agencies (Standard & Poor's, Moody's, etc.) will give risk ratings to determine the insolvency (or bankruptcy) risk. If that risk is high, then uh...don't lend money to them. Duh.