Building business credit is one of the greatest opportunities for small business owners. It provides our business with the ability to obtain financing for unforeseen expenses, operations, expansion costs and investments.

There's so much going on with corporate credit that there are several different fields devoted to servicing it, including business credit cards, small business loans, accounts receivable factoring, merchant account cash advance, lines of credit, equipment financing, secured/unsecured loans and many others.

These types of financing have been around for a long time, so you'd think that by now we would know all there is to know about corporate credit. After years of studying and applying every aspect of it, there are still many facets that remain secretive. And because it is so complex, we tend to simplify information about how it works in order to make it more understandable.

This has resulted in many myths about building business credit. Let's look at the top 10 myths that have been circulating about business credit, beginning with, of all things, its starting line.

10: Sole proprietorships can establish corporate credit

A sole proprietorship is not considered a separate legal structure. Instead, it is considered a personal extension of you so you don't have any protection from them. So every time you apply for credit for your business you will need to supply your social security number as the number that identifies your business.

As a result you are responsible for all debts and agreements you enter into in the name of your business; you're also on the hook for all of your partners actions in the name of your business as well.

9: Using personal credit for business has no effect on the corporate veil

When you use your personal credit for the benefit or operation of your company it can lead to an "alter-ego" decision by regulatory or a financial organization, and a piercing of the corporate veil. This would directly endanger the owners personal assets and make the owner or owners directly liable for the penalties or repayment of any debts incurred by the business or corporation.

8: Obtain unlimited business credit for real estate investing

There are certain industries like real estate investing that are flagged as a high risk with the business credit bureaus. If you plan on investing in real estate then you will want to make sure that the company you are building corporate credit for is not "real estate investing". Most banks will automatically turn you down because your company is operating in a high risk industry. You still will be able to invest in real estate but you may have to set up a business that does business development, business management, business consulting, marketing & advertising, training and development, etc. and then operate your real estate investing from a separate division of the company.

7: Credit repair is illegal and cannot be done.

False. Consumers have every right to repair their own credit in accordance with the Fair Credit Reporting Act. If you choose to use a credit repair company be sure to verify its track record with the BBB. Also, if you are paying for the service before it's rendered make sure the company is in compliance with the Credit Repair Organizations Act (CROA). *Non Profits and Credit Union Service Organizations (CUSO) are exempt from CROA.