The escalating drainage of natural resources and the augmented environmental crises have necessitated a paradigm shift from a linear economy to a circular economy (CE). In addition, the Sustainable business models (SBMs) blend with the CE principles to create economic, environmental, and social value. As a fundamental aspect of sustainable business models, the transition to CE has laid a solid foundation as a means of assisting sectors in reducing waste, optimising resources, and minimising their effect and impact on the environment. The study intends to conduct an extensive examination of the existing literature on CE, with a particular emphasis on sustainable business models that reinforce environmental, economic, and social impacts. Leveraging the database sources such as Scopus and Web of Science, a Systematic Literature Review was conducted, utilising the pertinent academic and industry literature. During the research, salient challenges are investigated, and practical solutions are proposed to improve the acceptance of CE principles in the current scenario to assist businesses in remaining relevant. It will be achieved by integrating ideas from theoretical frameworks and practical studies. This research contributes to the rising discourse on sustainable business models and the role that they play in ensuring long-term sustainability.