How long has Accounts Receivable Funding been available?
Accounts Receivable Funding or Factoring is one of the oldest forms of financing. It has been around since the Greeks and Romans. The Pilgrims used it to come to America. In the Industrial Revolution, the textile and garment industries used it extensively. Then in the 1980’s other large companies used it to grow their businesses. Finally, in the 1990’s small and mid-sized companies that extend credit terms to their customers realized the benefits of this funding option and now it is becoming a very viable financing solution for all types of businesses.
What types of receivables are acceptable?
Just about any valid invoice for services performed or product delivered is acceptable.
What is required before an invoice may be funded?
Your customer must be creditworthy and your product or service must be completed, delivered, and accepted by that customer.
Do we bill on our letterhead or yours?
You continue to bill normally. Checks are usually made payable to Lexx Funding, Inc. FPO your company.
Are government receivables acceptable?
Yes, nearly 50% of our business is government or municipal related. As a result, we are experts in this specialized area.
Must I agree to finance a minimum volume of future receivables?
No, finance one invoice or as many as you need to meet your cash flow needs. Stop when you wish, or continue as needed.
What is the smallest invoice that we can submit?
We specialize in small invoices as low as $1000. Usually smaller invoices are batched together. Our “sweet spot” is an invoice between $4000 and $15,000. We can help with larger invoices too.
Can we qualify if we already have existing credit lines or SBA loans?
Yes! We complement and work in cooperation with your existing lenders to enable you to access even larger amounts of funding.
Does receivables financing make good business sense?
Yes! Thousands of firms use receivables-based financing when cash flow dries up due to slow paying customers or when traditional financing is either unavailable or insufficient to fund needed growth. Our “credit line” is exceptional in its speed, ease, and flexibility. Factoring may be the difference of a small company surviving and growing or going out of business.
What will my customers think?
Receivables-based financing is used by many of the largest corporations in the world to improve cash flow, support growth, and increase profits. Many of your customers may use this service themselves and others have become familiar with it through vendors. The fact that you qualify for this “credit line” makes a strong positive statement.
Can we qualify even if we are just starting in business and have no credit history?
Yes, you can if you have credit worthy customers.
What happens if my customer doesn’t pay the invoice?
Lexx Funding is a recourse funding source. Your company will have to reimburse us either by having the invoice deducted from the next advance or replacing it with another collectable invoice.
Does Lexx Funding verify invoices with my customers?
Yes. As part of the setting-up process, you will send a notification letter to your customer to let them know that you are now working with us. We will supply the form letter. You will put it on your letterhead and send it to your customer. Invoice verification is an essential, and accepted part of funding. Because factors verify invoices with customers, they can tell clients if there is a customer service problem right away. A non-factoring client may not notice the problem until the invoice becomes past due. By that time, it may be too late to save the account.
How long does it take to receive the first funding?
The initial funding takes between 5-7 business days after we receive your signed contract. After the initial funding, your company can receive funds within 24 hours after invoice verification.
How is accounts receivable funding different than accounts receivable financing from a bank?
Lexx Funding will focus on the creditworthiness of your customers while banks will focus on your company’s financial history and cash flow. Since Accounts Receivable Funding is not a loan, it does not appear on your company’s balance sheet. Lexx can make a quick funding decision, while banks may take weeks to approve a loan.
Do I have to pay a fee to have my application processed?
No. Lexx Funding does not charge an application fee.