Insolvencyis when an individual or organization is unable to meet its outstanding financial debt towards its lender as it become due. Insolvency can be resolved by way of changing the repayment plan of the loans or writing off a part thereof.
Late payment has always remained a ball and chain to the Indian small and medium enterprise sector's growth. Most SMEs' cash flow can hardly withstand the burden of late payments but still these firms usually extend credit in the form of delayed payment. They can't help but do that. It has become a way of doing business. Saying a "no" means losing a customer for ever.