Under a little-publicized rule change enacted by the Small Business Administration (SBA), some religiously oriented businesses are now eligible to apply for government-guaranteed loans.

The new regulation, announced in June, states that only those businesses "principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs" will not be able to seek guaranteed loans. However, according to an SBA statement, small businesses will no longer be considered ineligible "merely because they offer religious books or articles for sale or because they encourage moral and ethical values based upon religious beliefs."

At a White House press briefing, SBA administrator Philip Lader said that businesses such as Christian bookstores, developers of religious computer software, and producers of religious gifts would be among those enterprises now able to seek SBA financial assistance.

Under previous SBA policy, which had been in place since the government agency's establishment in 1953, churches and "organizations promoting religious objectives" or attempting to shape public opinion were automatically disqualified from applying for SBA loans.

Lader said the change came out of President Clinton's concern about "the increasing secularization" of U.S. society and the "unintentional obstructions to religious expression [and] expressions of faith in the marketplace."

SBA deputy general counsel Ronald Matzner acknowledged that definition of what constitutes being "principally engaged" in religious activities will have to be determined by local SBA field officers on a "case-by-case basis."