The Circular Economy is on the top of the corporate agenda and provokes the interest of the academic community, governments, and policymakers. The Circular Economy paradigm is seen as a better solution and more sustainable alternative to the current linear system. To realize the benefit of the CE, new thinking and new business models are required. So far, there is limited progress has been achieved regarding the implementation of the Circular Economy. Therefore, scholars strive to understand the phenomena, providing conceptualizations, new strategies, and new business models, lacking empirical testing.

The purpose- this study is mainly conducted to test empirically a set of influencing factors that include drivers which stimulate SMEs to implement Circular Business Models and the barriers that prevent or complicate the implementation process.

Methodology- in order to fulfill the research objective, qualitative research with a multiple-case study approach is employed, focusing on three Swedish SMEs that operate in three different sectors.

Findings- the outcome empirically confirmed that organizational drivers related to leadership and organizational culture, resource availability including technology and knowledge, financial factors, product and process development, society, environment, and stakeholder pressure, geographical proximity, entrepreneurship, and bran strengthening are seen as driving and facilitating factors to implement Circular business model. While, the lack of supportive regulation and policies, consumer behaviors related to single-use culture, the nature of the product and material, and the presence of incompatibility and monopoly in the supply chain are observed as major barriers.