The Small Business Administration issued new regulations on the Paycheck Protection Program. The SBA now excludes independent contractors from being included in a business’s payroll costs when calculating loan amounts, according to the World Floor Covering Association (WFCA).

“Independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation,” the SBA stated in its draft of PPP regulations.

The PPP loans are part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to help businesses financially weather the coronavirus crisis. The CARES Act states that the payroll cost is defined as the “sum of” a list of costs “and” the “sum of payments of any compensation to or income of a sole proprietor or independent contractor,” according to WFCA.

“While it can be argued the SBA is incorrect based on the wording of the Act, SBA will be administering the loans and it is recommended that its interpretation be followed until this issue can be resolved,” WFCA stated.

WFCA also noted the new regulations limit how much of the loan can be forgiven.

“The CARES Act required that the amount forgiven could be reduced if the employer retained fewer employees than employed between February 25, 2019 and June 30, 2019 or, at the business’s election January 1, 2020 to February 29, 2020,” WFCA stated. “The SBA rules, however, provide that “‘not more than 25% of the loan forgiveness amount may be attributable to non-payroll costs.’”

As the administration works to clarify PPP regulations, the $350 billion loan program has also struggled with technical glitches since launching April 3, according to NBC, causing uncertainty as to when the thousands of applicants will receive the loans.

Applications for the loans are submitted via portals used by banks, which have no way of communicating with SBA computers, and bankers have resorted to entering the information by hand into the SBA’s system that guarantees loans and generates loan numbers. Several bank officials told NBC they were still waiting on SBA to generate loan numbers and have only been able to process a small number of applications so far.

SBA told lenders it was experiencing ongoing technical difficulties that slowed its system and prevented some lenders from creating new logins and passwords, according to NBC. Banks reported tens of thousands of applications just in the first day, while the SBA usually processes about 60,000 loans in an entire year.