The purpose of this project was to investigate the factors that influence the capital structure of micro and small enterprises (MSEs) operating in Kapenguria Town. The capital structure that an enterprise chooses is bound to determine their operationalization and performance. Therefore the objective of this study was directed at identifying the factors that influence the choice of capital structure of micro and small enterprises, establish the level to which the factors determine their capital structure and to analyse extent to which enterprise use borrowed funds. The study employed a descriptive survey research design through the use of self-administered questionnaires with both open ended and closed ended questions directly collecting raw data from selected MSEs in Kapenguria Town. The study target population was 61 registered business enterprises in the town and census sampling was employed. Findings the null hypothesis, H01 There is no significant relationship between age of a firm and its capital structure. The study rejected the hypothesis (β = 0.521, P = 0.000). The study concluded that the age of the firm influenced the capital structure of the firm. This is attributed to the fact that how old a firm is plays a role in determining its grounding in the market place and its ability to have found a niche for itself. The firm is therefore able to have more finances to inject into the business as equity as a result of being well established.