If you are the co-signer, then you are right. My 22 yr old grandson could pay $75 to form an S-corp in Georgia. He has to put $500 in it, and the corporate book you get back will have 100 stock certificates in it ( because an s-corp can't have more than 100 share holders). No, his corporation could not go the next day and borrow $50k, 100 times the amount the company is worth. with no collateral and no co-signer But, if his company has a lot of cash flow, and the company has secured loans with him co-signing, to buy equipment, inventory, etc., and always paid it back, it may get to where it can borrow with no co-signer by putting up collateral the business owns. Eventually, he may get to the point that the company can secure a signature loan. If he had to loan his company the $50k himself, or had to co-sign that company loan, then no he isn't entirely using OPM. But even in this case, he is less exposed to loss than taking out a personal loan, or using his personal savings, to buy that $50k group of cows.
I realize this is a lot to absorb for people who don't have a lot of knowledge in business, taxes, corporate finance, etc. , and no one can learn it all from scratch from a few comments on a thread. It has taken me 35 years. I started learning in 1988 when I had to pay $68,000 in taxes from the money I made in my insurance agency. I was a sole propietor and commissions were paid to me..1099'ed to my SS number. The first year or two in business, commissions had started out at $400 a month the first month, and had gotten to about $2k a month, so I never worried about taxes. But that year I landed a large, 1100 employee group benefits account that paid about $20k a month, so that's why I ended up having to pay that much taxes. It snuck up on me, so to speak. So, my accountant suggested I form my first S-corp. Most taxes I have ever paid since then was maybe $2-$3k a year. Most years I let it show a loss. The next year I bought a truck and told her I titled it to my S-corp., so what now? She said damn, this is a mess, you should have let the company buy it ( I had paid cash), so I sold it to the company, and financed it for for the company. Next year I bought my then-wife a new SUV ( she was my secretary on paper, that I paid a salary to so she could be the 2nd employee the company had to have to buy group health insurance). This one, I co-signed a note for the company to buy it. A few years later I bought another truck, and the company secured the loan on its own. Some years, when manufacturers started offering 0% interest for x amount of months, I would personally buy one and finance it myself. Even if I had the cash to buy it, it would be foolish to do so, when there was no interest for 24 or 36 or however many months the car companies offered free financing. I would then lease that vehicle to my company. This is why S-corps were created..to allow the small business owner the ability to access some of the advantages big corporations have.
I don't care if people are skeptical, or un-educated on these concepts, or have a different way of doing it ( that I may not know of and might be better!). But don't try to say it can't be done when I have done it many times, and millions of people all over the country do it every day.