InvestNext Checks:
When you send Checks through InvestNext, they are printed and mailed by our 3rd-party partners, Lob. Lob is a direct mail API. When they send Checks on your behalf, they're actually cutting the Check from your specified bank account. So the only information they can access is what the Check looks like and the tracking events once it's mailed.
Your money is not transferred to Lob. When an investor deposits a Check that was mailed through InvestNext (Lob), it will pull funds directly from the Sponsor's bank account to deposit into the Investor's bank account.
Disclaimer: Since we don't actually handle the funds, we can't see if and when a Check is cashed/deposited, canceled/stopped, or returned. You'll need to contact your bank to find out more information about this!
Tracking Events:
InvestNext receives limited tracking events for Checks from Lob; tracking events are received when a Check has entered the USPS system and when the check is in the 'local area', or final zip code. The Checks are sent via USPS First-Class mail. InvestNext cannot ascertain whether a Check has been delivered to the final address.
Check Appearance:
The Investor's name and address are printed on the Check. The name and return address of the originating company (the "Project" that sent the distribution) are also printed on the Check. Both addresses appear through the windowed envelope the Check is mailed in. Check numbers are automatically assigned, starting at 10000. The signature field is drawn using a stylized font that emulates a handwritten signature. An example is shown below.
NOTE: Any line items for the Check are printed on the Check stub.
BEST PRACTICES:
InvestNext recommends the following actions to improve deliverability and minimize the risk of returned Checks:
Advise Investors to update their Investing Account mailing addresses on the Investor Portal.
Share an image of the example Check stock with your bank to determine if the Checks are acceptable.
Provide your bank with a positive-pay list (exported from InvestNext) for each distribution to reduce rejection and fraud risk. A Positive Pay List can be downloaded from the Distribution details via the Export button:
Additional Considerations
InvestNext will, by default, group Custodian payments together. For instance, if two IRA Accounts under the same Custodian are receiving a distribution, one Check will be sent to the Custodian with each payment recorded as a line item on the Check stub. If this is not the desired behavior, the user may deselect the ‘Group custodian payments together’ option when processing payments.
Funds are not withdrawn from your account until investors have deposited the Check. InvestNext does not handle any funds during an ‘Auto-Check’ payment.
ACH vs. Check: UPGRADE TO AUTO-ACH
InvestNext strongly recommends sending distribution payments through the ACH network whenever possible. InvestNext’s ACH feature has the following benefits:
Full payments tracking: InvestNext can track ACH payment status down to the final deposit in the Investor's bank account
Full visibility into returns: In the rare occurrence where a payment is returned (due to incorrect bank details, insufficient funds, etc.), InvestNext receives full return codes and is able to trace and rectify the issue.
Payment notifications: Investors are notified via email when payments have been initiated and when funds have been deposited into their bank accounts.