Micro, small, and medium enterprises (MSMEs) operate under persistent resource constraints, making the effective mobilization of intangible resources increasingly important for sustaining business performance. This study examines how social capital and intellectual capital contribute to MSME performance and investigates whether innovation serves as a mechanism through which these resources are transformed into business outcomes. It also examines the role of managerial ability in strengthening the relationship between social capital and MSME performance. Drawing on Resource-Based Theory, the study employed a quantitative explanatory design involving 204 ultra-micro food and beverage entrepreneurs. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS. The findings demonstrate that social capital contributes to both innovation and MSME performance, while intellectual capital strengthens innovation and has a particularly important contribution to performance. Innovation also functions as a significant pathway linking both social capital and intellectual capital with MSME performance. Managerial ability contributes directly to performance but does not significantly moderate the social capital–performance relationship. These findings indicate that MSME performance depends not simply on possessing relational and knowledge-based resources, but on the capacity to mobilize and transform these resources through innovation and effective managerial action. The study extends the resource-based perspective by highlighting innovation as a critical resource-conversion mechanism in ultra-micro enterprises.