This study aims to determine the influence of financial literacy and digital innovation on business performance and the sustainability of SMEs in Malang City. Utilizing quantitative methods and the questionnaire approach for data collection from primary sources, the data were subjected to Path Analysis. The findings reveal a positive correlation between financial literacy, digital innovation, business sustainability, and SME performance. Notably, the impact of digital innovation on SME business sustainability is direct, without mediation through SME performance. Conversely, the variable of SME performance acts as a mediator in the relationship between financial literacy and the continuity of SME businesses.