Rural Vitality Fund - Wellmark committed $5 million in venture capital to Iowa Farm Bureau Federation's (IFBF) Renew Rural Iowa program. This program encourages business development and expansion in rural Iowa communities with less than 30,000 people.
Investments are made to qualified companies resulting in the economic impact they provide on surrounding communities including new job creation, expansions, and growth in retail spending. This fund is intended to work with traditional capital sources and offers equity and/or debt infusions to small or mid-sized firms, financial backing and private financing options, as well as mentoring for entrepreneurial growth. No sub-prime loans, grants, or forgivable loans are offered. Businesses from Boone, Dyersville, Maquoketa, and Elkader are among past recipients.
How the Program Began
In 2002, the Iowa Legislature passed and Governor Vilsack signed into law, a reduction of the state's insurance premium tax from 2 percent to 1 percent, phased in over a four year period through 2007. This legislation was viewed as crucial to keep Iowa-based insurance companies competitive, as many other states offered lower tax rates to insurers.
As part of this change in law, several Iowa-based insurance companies voluntarily agreed to support a plan to commit $60 million of the projected premium tax reduction for economic development in Iowa.
Communities the Program Has Helped
Since 2003, Wellmark has made over 60 venture capital investments in 34 communities throughout the state, including Cedar Rapids, Clinton, Davenport Ellsworth, Fairfield, Harlan, Hiawatha, Lake Mills, Mason City, Mt. Pleasant, Pella, Sheffield, Washington, and Waterloo, among others.
For questions, comments, possible investors or small business loans, e-mail CommunityVenturesFund@wellmark.com .