The House passed a bill Thursday eliminating federal funds for the Small Business Administration's "504 loan" program, which guarantees credit for fixed-asset purchases.

Lawmakers also:

Increased to 15% from 10% the minimum down payment for 504 loans.

*Allowed banks to securitize up to 10% of the amount of a "7a loan." The 7a loan guarantee program is SBA's largest.

*Directed the SBA to study how to improve the agency's loan programs.

The Senate is expected to take up the bill before Congress adjourns Sept. 28.

Congress must also pass an SBA appropriations bill. Expected cuts in federal guarantees would decrease 7a loan volume from $10.8 billion in fiscal 1996 to less than $8.5 billion in fiscal 1997.

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