Following intensive recent debates, the literature still offers ambiguous results on the ultimate effect of slack resources on firm performance, particularly in small and medium-sized enterprises (SMEs). We address this gap by examining how two different types of slack resources (high- and low-discretion slack) affect firm performance and how these relationships are moderated by family ownership and by operating in a high-tech industry. Using a sample of 8,345 Italian SME we show that slack is not always beneficial to firm performance and that the slack-performance relationship is contingent on both internal and external factors.