Financing constrains on investment are mainly important for small privately owned firms. Yet most of the investment literature focuses on the financing constraints of large publicly owned firms. This paper develops a financing constraints test based on a variable capital investment equation. Because it does not require the information about marginal q, the test can be easily applied to small firms not quoted on the stock market. Importantly, the test does not rely on restrictive assumptions about the adjustment costs of fixed capital. We confirm empirically the validity of this test on a sample of small manufacturing firms.