Shawshank

The funny thing is, on the outside, I was an honest man, straight as an arrow. I had to come to prison to be a crook.
- Andy Dufresne

[Shawshank @Shawshank__]

Use credit cards not debit cards, earn all the rewards, but PAY IN FULL each month. 

Credit is a tool, not a substitute for reserves in the bank though. 

Understand the rules of the game so you don't get played. 

Good vid here:
https://t.co/VX70Y92htw

[Shawshank @Shawshank__]

@lindaxie Interesting

[Shawshank @Shawshank__]

@dara_venture 😂😂😂 facts

[Turner Novak 🍌🧢 @TurnerNovak]

Flex has been on a tear solving very hard, unsexy problems for business owners. Now doing it globally!

It’s not often growth rates accelerate while at 9-figures in revenue. Especially without burning cash.

Very glad @BananaCap_ invested 3x when they were first getting started

[ꪝe @_wej01]

Capitol One tried making me pay off my mom's credit card balance when she died. I told the agent she had passed. Since I didn't sign the credit application I was not responsible and that lying to me by telling me as my mom's adult child I was responsible, attempting to collect a debt I was not responsible for...

[Shawshank @Shawshank__]

@cleartheshelf @ChrisRacic @flips4miles That's awesome. In this age of ai everything, in person cuts thru the noise.

[Shawshank @Shawshank__]

@FlexSuperApp Pretty fitting for Flex. Rocket ship blasting off in the bottom left.

[Shawshank @Shawshank__]

Biz credit card (@FlexSuperApp) + Plastiq
Biz credit card (@FlexSuperApp) + Plastiq
Biz credit card (@FlexSuperApp) + Plastiq
Biz credit card (@FlexSuperApp) + Plastiq

Min 60 days float.

[Shawshank @Shawshank__]

@nicknow @amelia_tweetz

[Shawshank @Shawshank__]

@oliverbrocato @nikitabier @elonmusk Me thinks it’s because you consistently add value.

[Shawshank @Shawshank__]

@jonahhodges_ Cash conversion

[Shawshank @Shawshank__]

@SamMendelsohnW6 @FlexSuperApp for card float.

Flex + Plastiq for ACH/wire float.

[Shawshank @Shawshank__]

Business owners obsess over revenue.

Sophisticated operators obsess over their cash conversion cycle.

Because profitable companies don’t go out of business from a lack of revenue.

They go out of business when they run out of cash.

[Shawshank @Shawshank__]

@SamMendelsohnW6 Holy shit

[Shawshank @Shawshank__]

@maxkarpis Ruh roh

[hunter @hxxntrr]

Stop using your own money to grow your business

The smartest operators in America fund growth with bank capital and let their personal cash compound somewhere else.

The dumbest pay for ad spend, inventory, equipment, and payroll out of their own checking account while their savings earn 4% in a high-yield account

If your business is growing, every dollar of your own money you put into it is a dollar that could have been borrowed from a bank at 0% APR for 12-15 months. You're spending the most expensive money you have (your own) when the cheapest money in America (bank credit at 0%) is sitting there waiting

The exact numbers on what your own money costs vs bank money:

Your own cash earning 4.5% in a Mercury or SoFi savings account: every $50K spent on the business costs you $2,250/year in foregone yield
Your own cash invested in the S&P at 8% historical: every $50K spent costs $4,000/year in foregone returns
0% APR business credit cards: every $50K borrowed costs $0/year for 12-15 months
0% APR with Plastiq processing for non-card vendors: every $50K costs $1,250/year

Math: if you have $100K in savings and you spend $50K of it on inventory while leaving $50K in savings, your effective cost is $2,250-$4,000 per year. If instead you borrow $50K from Chase at 0% and leave the full $100K in savings earning yield, your effective cost is $0 per year

You just made $2,250-$4,000 by NOT touching your own money. Same business outcome. Same inventory bought. Different financial position

How you set this up systematically:

Step 1: Open business checking at Mercury, Bluevine, or Relay (high-yield business banking, 4.4% APY on idle balances). Move all your business reserves there. The cash earns yield while it sits

Step 2: Apply for $100K-$250K in 0% APR business credit cards. Chase Ink, Amex Blue Business, US Bank Triple Cash, Bank of America Business Advantage. Stack 4-5 cards over 11 days

Step 3: Use the credit cards for everything. Inventory, ad spend, software subscriptions, contractor payments, vendor invoices, payroll if your provider accepts cards. Anything that would have come out of your business checking now comes out of bank credit instead

Step 4: At the end of each month, pay the credit cards down with cash flow generated by the business (not by dipping into your reserve cash). The reserves stay invested, earning yield

Step 5: At month 11, apply for a fresh round of 0% cards and roll any remaining balance into the new 12-15 month promo. The cycle continues indefinitely

What this changes about your business permanently:

Your operating capital is now permanently loaned, not permanently spent. Your reserve cash compounds in the background. Your tax position improves because business interest expenses are deductible while personal investment income stays tax-advantaged

Most operators don't run this play because they grew up being told "don't borrow." That advice applies to consumer debt at 24% APR. It does not apply to 0% APR business credit deployed into productive use. The wealthy borrow as much as they can at low rates and let their assets grow

A client running an ecom store doing $1.4M a year used to fund every Q4 inventory cycle out of his business checking. $230K of cash drained every September, recovered every January. His average annual savings balance: $80K. Yield earned: $3,600

We restructured his Q4 funding through stacked 0% business credit cards. $230K of inventory cycled through Chase, Amex, US Bank, and BofA at 0%. His business checking now holds $310K average balance. Yield earned this year: $13,950

Same revenue. Same inventory. $10,350 a year in additional yield earned by switching the source of funding from his own cash to bank credit

The richest operators in America don't fund growth with their own money. They fund it with the bank's. Their own money compounds. The bank's money cycles. The two engines run in parallel

Most operators run only one engine and wonder why they aren't compounding

(we get 700+ score business owners $100K-$250K in 0% business funding so they stop spending their own money on growth. link in bio)

[Shawshank @Shawshank__]

My most profitable business owner clients gladly paid Plastiq’s 2.99% fee to use a card for ACH and wire payments.

For many pass through businesses, that fee generally reduces taxable business income before it flows through to the owner’s tax return.

They also earned 2% cash back on those same payments each month.

They evaluated the net economics, not just the fee.

*Consult your tax advisor.

[Shawshank @Shawshank__]

Do you know why Capital One generally doesn’t issue a 1099 for the 2% cash back on the Spark Unlimited card?

Because cash back is generally treated as a purchase price adjustment rather than taxable income.

Now think about the economics.
🤔

IRS guidance has generally treated purchase rebates as purchase price adjustments rather than taxable income. See Rev. Rul. 76 96. Tax treatment depends on the facts and circumstances.

*consult your tax advisor

[Shawshank @Shawshank__]

Business owners see the Plastiq or Melio fee.

Their CPA sees an ordinary and necessary business expense under IRC §162.

For pass through businesses, that expense generally reduces taxable business income before it flows to the owner’s 1040.

Think after tax cost, not just the fee.

Combined with a business card, it can also extend your float.

*Consult your tax advisor.

[Shawshank @Shawshank__]

When your Amex gets throttled. 😂

Whether you’re buying ads or celebrating an NBA championship… never ideal.

[dank @cptdankkk]

Mark Cuban says his AmEx Black Card got declined buying a $140,000 bottle of champagne after the Mavericks won the NBA Finals

“Jason Terry took over and was like, ‘Okay, we're getting these buses. We're all going to LIV.’ I'm like, ‘Cool. Let's go.’ And everybody had family and everything. We just went there and tore it up”

“Then one of the owners or whoever, came up to me and they're like, ‘Hey, we got this $140,000 bottle of champagne’, and Dirk is right there. He goes, ‘Yes’”

“I'm like, ‘Okay, whatever.’ I'm feeling no pain. I get out my Black and I give him the card. And then Dirk 10 minutes later is like, ‘Where is it?’”

“Then I get a tap on the shoulder. They're like, ‘Mr. Cuban, hey, come here.’ And so I got to go to the back of the office. My card got declined. You know how when you get a new card, you got to sign it, call in. I hadn't done that yet”

“I get on the phone, call AmEx, and they're like, ‘I'm sorry, sir.’ I'm like, ‘Did you watch TV today. Did you watch the basketball Finals today. Can I talk to your manager?’ And they finally approved it. The pictures are great of us. Just huge bottle”

[Shawshank @Shawshank__]

Business owners see the Plastiq or Melio fee and immediately think “cost.”

They should be thinking “after tax cost.”

Most LLC and S corp owners pay taxes on their business profits personally.

The Plastiq/Melio fee is itemized separately from the payment amount.

*Consult your tax advisor.