What ESUS approval really unlocks: solidarity employee savings and equity

« We hold ESUS approval — what aid can we apply for? » The question comes up constantly, and its wording contains the mistake. The approval does not open an aid desk. It opens access to funding channels that the law closes to those who do not hold it. For building a funding plan, the difference is considerable.

The core of the scheme: solidarity employee savings

The approval is governed by article L. 3332-17-1 of the French Labour Code. Its place in the Code, among the provisions on employee savings, tells you its primary function: channelling part of French employees’ savings towards enterprises with a social purpose.

The mechanism rests on so-called « 90/10 » funds. These invest the large majority of their assets in conventional markets and devote a minority share — in the order of five to ten per cent — to financing solidarity enterprises. Since the economic modernisation act of 4 August 2008, any company setting up a company savings plan must offer at least one solidarity fund among the options available to its employees.

That obligation has created a large and regular flow of savings whose solidarity pocket may only be invested in approved enterprises. For a social-economy organisation, it is the difference between seeking equity case by case and being visible to a set of fund managers who are themselves obliged to deploy that pocket.

One useful clarification: this money arrives as securities — share capital, association bonds, other debt instruments — not as grants. You therefore have to be ready to open up your balance sheet, which presupposes articles of association and governance that allow it.

The tax advantage for those who invest in your capital

The second lever concerns your investors rather than you. The income-tax relief for cash subscriptions to the capital of SMEs provides an enhanced rate for subscriptions to socially useful solidarity enterprises and to solidarity property companies, compared with the standard rate.

This point calls for caution in your communications. The enhanced rate has been extended several times, and its application depends both on clearance of the scheme by the European Commission under State-aid rules and on the publication of the texts setting its entry into force. Before putting it in front of individual investors, check its exact status at the date of the intended subscription — and have their own adviser check it too. A tax promise that does not materialise damages an investment relationship for a long time.

Specialist funders and the signalling effect

Beyond the two statutory channels, the approval works as a shared filter across the solidarity finance ecosystem. Specialist funders, some local authorities and several support schemes use it as an eligibility test, because it has a rare quality: it is issued by the State, verifiable by a third party on the national list published by the French Treasury, and based on quantified rather than declaratory criteria.

That signalling effect has measurable economic value. In a study published in 2014 in the Journal of Business Ethics, Simon Cornée and Ariane Szafarz use data from a French social bank and show that it charges below-market interest rates on socially oriented projects, and that the borrowers concerned respond to those advantageous terms with a significantly lower probability of default (see the study). Solidarity finance is therefore not a degraded market: it is a market running on different mechanics, and the approval is the pass that gets you in.

On the investor side, Alex Nicholls showed as early as 2010, in the Journal of Social Entrepreneurship, that social investment institutionalises around distinct investor rationalities that do not reduce to maximising returns (see the study). A public, enforceable approval provides exactly the common reference point those heterogeneous logics need.

What the approval does not give you

The other side of the scheme deserves equal clarity, because disappointment almost always comes from miscalibrated expectations.

No automatic grant. The approval on its own opens no direct aid.

No social or tax relief for the company itself. The tax advantage described above benefits the investor, not the approved organisation. The regimes specific to the non-profit sector — such as the exemption from commercial taxes for certain associations — follow entirely separate rules.

No regulatory exemption. The approval replaces no authorisation specific to your activity: the licensing of a social or medico-social establishment, personal-services approval, or registration as a training provider. Those obligations continue to run in parallel.

No guarantee of funding. Being eligible is not being funded. Solidarity fund managers apply their own investment criteria, often demanding on economic trajectory and governance.

How to make use of the approval once granted

Three concrete uses are worth organising as soon as it is notified.

Make the approval visible. Mention it on your website, in your annual report and in funding applications, with its expiry date. A funder will then check the national list.

Prepare the file that solidarity funds expect. It resembles a conventional investment file — business model, trajectory, governance, equity needs — plus a demonstration of impact. The work done for the approval application forms its basis.

Frame the calendar. Approval runs for five years, or two for a company created less than three years earlier. An expiry falling in the middle of a fundraising round is an entirely avoidable problem, provided you saw it coming. The application and renewal mechanics are covered in our article on filing with the DDETS.

Take action

List your funding needs for the next eighteen months and pick out those requiring equity or quasi-equity: those are exactly the ones the approval can unlock. Then check that you meet the four conditions of article L. 3332-17-1 before committing resources. The ESUS approval page sets out the competent authority, the steps and the terms of validity.