Unfair banking practices and “damaging” financial regulators are harming small businesses and putting innovation and growth at risk, parliament’s Treasury committee has warned. A report from the committee’s inquiry into access to finance for small and medium-sized enterprises (SMEs) said a lack of supportive policies were compounding problems for firms that had survived a “torrid” five years, which included the global pandemic and energy crisis. “Confidence amongst SMEs in accessing finance has fallen and acceptance rates for business credit has lowered significantly,” the report said. Related: ‘As transparent as a brick wall’: British firms fight back against ‘Business Improvement Districts’ “Unfair banking practices … may have further limited access and suppressed demand. This difficult small business environment is disincentivising risk-taking, innovation and, potentially, growth,” it warned. MPs said a number of practices were harming firms, including the use of personal guarantees – where borrowers often have to put up their home as collateral against a loan. The committee’s report also highlighted a growing concern about so-called “debanking” – when customers’ accounts are closed by their bank – noting that lenders had shut 140,000 SME accounts in 2023 alone, often without adequate explanation. It said closures often hit specific sectors...