Shrinking firm close to bankruptcy (3)
I believe the answer is:
coy
'shrinking' is the definition.
(both can mean shy)
'firm close to bankruptcy' is the wordplay.
'firm' becomes 'co' (a firm is a company).
'close to' indicates one should take the final letters (the close/ending of).
The last letter of 'bankruptcy' is 'y'.
'co'+'y'='COY'
(Other definitions for coy that I've seen before include "Demure, like Marvell's mistress" , "Military team in brief" , "Pretending to be shy or embarrassed" , "Group of soldiers" , "reluctant to divulge information" .)