Faith Apparel Inc., an 80-employee sewing shop in Tazewell County that makes women's sleepwear.

The Players

Linda Rasnake, 56, owner of Faith Apparel and a Tazewell native with 35 years of experience in the garment industry.

The Problem

Rasnake wanted to open her own sewing shop, but couldn't raise the operating capital she needed to pay wages and buy supplies while getting the business started.

The Background

Rasnake was at a career crossroads last year. She was a plant manager at a sewing shop in Gastonia, N.C. Her boss wanted to transfer her to a Tennessee plant, but Rasnake wasn't interested.

She went home to Tazewell for a visit last July and saw that the local sewing plant where she'd started working in 1962 had closed a month earlier. Rasnake saw the chance to open her own shop. But there were many loose threads.

The Internal Revenue Service had placed liens on the shop's equipment to recover debts owed by the owner of the defunct company. Although Rasnake wanted to buy the equipment, she could not use it as collateral. "I couldn't get a loan with anybody because I couldn't give them a clear title to hold."

She proved, though, that she could find customers. In just a few hours on a telephone in the Tazewell County economic development office, Rasnake lined up a commitment for $1.5 million worth of work from Beverly Creations, a New York-based company that she had worked for in the 1980s as a quality-control specialist. But how would she start a business with limited cash?

Rasnake scraped together what money she could. She put up her 1991 Cadillac as collateral and got a $10,000 loan. A Tazewell resident she'd known for years lent her $5,000. With that and customer commitments, her business had promise.

She worked her contacts, starting with the laid-off workers from the closed shop. Many were women Rasnake knew from her days there. "The girls," as she calls them, agreed to work for five weeks before collecting their first paycheck. The fifth week, she would pay them for the previous week, then for the next month they'd get two checks a week.

The workers helped clean up the 20,000-square-foot shop to get it ready. Rasnake's $15,000 was spent on thread, new lights and a month's payment on workers' comp coverage and other insurance, plus a lawyer to handle paperwork.

Rasnake asked the owners of Beverly Creations to pay invoices in less than a week instead of the usual 15 to 30 days, and they agreed. "If they hadn't done that, I'd have had so [many] cash-flow problems I wouldn't be here today. That $15,000 wouldn't stretch that far." A New York-based thread supplier she knew helped, too, by agreeing to let her buy thread on credit. "I've just got a lot of people to be thankful for," she says.

Since she couldn't buy the sewing equipment, Rasnake leased it. She says the IRS was cooperative. She opened the shop on Labor Day in 1998 with 18 workers, and within a month she had hired 60 more. By Thanksgiving she had paid the workers their overdue wages and repaid her $5,000 loan with interest.

Now Rasnake values her contacts in the garment industry more than ever: They had faith in her ability to get the business off the ground, and they were willing to help. "It took 35 years of developing these relationships [with people], of just being open and honest with them," she says.

Sometimes good relationships are the best collateral there is.