Sam Jones heads up SBA Region VII

by Clarissa A. French

SBJ Managing Editor

Public service is nothing new for Mt. Vernon attorney Sam Jones, who was appointed Nov. 1 to the position of Region VII administrator for the U.S. Small Business Administration.

Sam Jones' new career

"My rsum shows that I change careers in every year that ends in one. This is career number four," Jones said.

And with his career changes, "I don't veer off; I make a 90-degree turn."

Jones holds a bachelor of science degree in political science from Southwest Missouri State University and a juris doctor degree from the University of Missouri Columbia School of Law.

From 1971 to 1981 Jones practiced law as a prosecuting attorney in Lawrence County.

In 1981, Jones became chairman of the Missouri State Tax Commission.

"Twice in my career I have gone to Senator Bond either as governor or as senator and said "Gee whiz, I would like to do Job A," and twice he has called back and said "Close, but no cigar. Would you consider Job B?'" Jones said.

In 1981, "Job B" was to steer the Missouri State Tax Commission through the first statewide reassessment in Missouri history.

"We completely overhauled every assessors' office in the state. It had the potential to be extremely politically volatile and we by that I mean we the commissioners, we the assessors in the state and the legislature pulled it off without a hitch. One quarter of 1 percent of the taxpayers in the state appealed to the state tax commission over their assessment ... out of 2.2 million parcels of real estate."

After the statewide reassessment project, Jones became assistant to the president of Tenenbaum-Hill Associates, a property tax consulting firm in Kansas City. Then he managed the property tax practice of Arthur Anderson and Company in the North Central United States.

Jones took on Oklahoma's Ad Valorem Task Force from 1990 to 1991, and he was offered but refused another statewide reassessment project in Kansas.

"I am the only person in the history of property tax administration who has completed a statewide reassessment and been asked to do another one," he said.

Most recently, "from 91 to this year, I was back in Lawrence County as a judge, practicing law again," with the associate circuit court, Jones said. Now, "along comes a year that ends in one; it's a new career for Sam Jones."

Looking forward

"It's going to be a lot of fun," Jones said of his new position as an SBA regional administrator. "There is a wonderful, wonderful opportunity to hopefully expand the growth of small business in the four-state area I serve ... Missouri, Iowa, Nebraska and Kansas."

In preparation for his new job, Jones underwent National Association of Gov-ernment Guaranteed Lenders training in St. Louis.

"I took the class that started with processing the SBA application for a loan, from the lender's side to the borrower's side," Jones said.

He was surprised, he said, because the NAGGL told him, "You're the first re-gional administrator that's ever attended one of these classes,' and I said How on earth do they know what's going on out in the field?'"

Jones said he wants to know the job from the ground up. "I want to know what the small-business owner faces when he goes to his banker and the banker says, for whatever reason ... we suggest you go the SBA route. Well, I want to know what happens at that point. What is expected of that borrower? What burdens do we as a bureaucracy put on that lender to get this loan approved or get the guaranty approved?" Jones said.

He added, "I told the people in the (SBA) office, I don't know that I'll be able to do every job in this office, but I'll at least know what you do and why, and maybe have some idea on how to do it better.'"

More lenders

"The only disturbing thing I have found since I got to SBA is that membership in this organization of government-guaranteed lenders is down," Jones said. "We're dealing with fewer banks than we were a few years ago.

And while some might point to bank consolidation as a mitigating factor, that cuts no ice with Jones.

"A bank consolidation in southwest Missouri and much of the Midwest is like throwing a concrete block into a swimming pool. It generates ripples, or waves, (each) of which (is) a new startup community bank," Jones said.

"Those banks should be our customers, clients, partners ... and one of the reasons is that we can help them make money," he added.

The big banks, such as Commerce Bank, Firstar, Wells Fargo, etc. don't necessarily need SBA to make money, Jones said, "but small banks, I want to go to them and say Your capital lending limit is based on the size of your bank. I can help you be a bigger bank; I can make you look a lot bigger, be a lot bigger and earn a lot bigger than you really are.'"

The only thing that counts against the bank's loan limit is the nonguaranteed portion of the loan, he said, "so we can get you income off of, say, a $100,000 loan, but only $20,000 of it is counted against your loan limit. We can get you a portfolio of loans that can be sold in the secondary market. You can sell those, generate liquidity for your bank or, if you don't need that liquidity, keep them at your bank; service them yourself for the day when you might need that liquidity."

Economic recovery

Small business plays a key role in the economy, and stimulating the economy means stimulating small business. To that end, changes are being discussed for how SBA does business.

"There are moves under way to reduce the guarantee fee that SBA charges, currently at 50 basis points or a half percent ... to 25 basis points or one-quarter of a percent. There's a move under way to eliminate the up-front charges on SBA loans," Jones said.

He added, "if we can eliminate up-front fees, reduce the guarantee fee on loans, for someone who wants to start a business or expand a business, add employees, buy inventory, buy capital goods, equipment, fixtures, that effect's immediate. We have a new employee on the books today, not next July. I think that adjustments in the fees charged by SBA can be a major factor in the economic recovery that we all long for and certainly that the (Bush) administration seeks."