Participatory loan and equity: what to know in 2026
The participatory loan is a subordinated debt treated as quasi-equity, strengthening ratios without diluting capital. The Relance scheme, however, has been closed since the end of 2023.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Quick answer. The participatory loan (Monetary and Financial Code art. L313-13) is a subordinated debt, repaid after all other creditors in case of difficulty, just before shareholders. Accounting-wise a debt, it is treated as quasi-equity and strengthens the company's ratios without diluting capital. The temporary Relance participatory loan scheme (PPR), launched in 2021, has been closed since 31 December 2023.
The participatory loan holds a place apart between debt and equity. It strengthens the financial structure without bringing in new shareholders, which makes it a valuable tool to step up. But you must distinguish the participatory loan, a lasting instrument, from the Relance scheme, which was temporary and is no longer distributed. Here is the gist for 2026.
A subordinated debt treated as quasi-equity#
The participatory loan sits midway between a loan and capital.
Legally, it is a debt, provided by the Monetary and Financial Code (art. L313-13). But it is a subordinated debt: in case of difficulty, it is repaid only after all other creditors, just before the capital providers. This very low rank earns it the treatment of quasi-equity: it strengthens the company's financial structure as capital would, without diluting shareholders.
It is this dual nature that makes the participatory loan valuable: it provides a long and stable resource, treated favourably by banks in their ratios, without changing the breakdown of capital.
The effect on ratios and access to credit#
The main asset of the participatory loan is its leverage effect on bank financing.
By strengthening quasi-equity, the participatory loan improves the company's financial ratios, such as the debt ratio (gearing) or solvency. Banks integrate this quasi-equity into their analysis, which can unlock or ease new financing. The participatory loan then plays a primer role: it strengthens the balance sheet and opens the way to a complementary bank loan, in a logic close to that of the Bpifrance guarantees and the growth loan.
| Feature | Participatory loan |
|---|---|
| Legal nature | Debt (Monetary Code art. L313-13) |
| Rank in case of difficulty | Subordinated, just before shareholders |
| Financial treatment | Quasi-equity |
| Effect on capital | No dilution |
| Effect on ratios | Strengthens gearing and solvency |
The Relance scheme, temporary and closed#
You must distinguish the ordinary participatory loan from the Relance participatory loan.
The Relance participatory loan (PPR), launched in 2021 as part of the recovery plan, was a temporary scheme, guaranteed by the State and distributed by banks and insurers, with an eight-year maturity and a four-year repayment deferral. This scheme has ended: its distribution has been closed since 31 December 2023. It must therefore not be confused with the ordinary participatory loan, which remains an available instrument, nor relied upon in 2026.
This distinction is important, because much online content still describes the PPR as if it were open, when it now belongs to the past.
Our view#
The participatory loan remains a relevant tool to strengthen the financial structure without diluting capital, provided it is properly placed between debt and equity. Its value is not only the resource provided, but the leverage it creates on access to bank credit.
Our approach is to use the participatory loan when the company needs to strengthen its quasi-equity to unlock financing, and always to check the real availability of schemes: the Relance PPR being closed, you must turn to ordinary participatory loans and other quasi-equity tools. Like any subordinated financing, it requires an analysis of the repayment capacity, in connection with the self-financing capacity.
A common case#
An owner sought to strengthen their equity to obtain a bank loan, without bringing an investor into the capital. They had heard of the Relance participatory loan, but the analysis recalled that this scheme had been closed since the end of 2023. The solution was to use an ordinary participatory loan, treated as quasi-equity, which strengthened the ratios and unlocked the complementary bank credit, without diluting capital. The distinction between the closed PPR and the lasting participatory loan was decisive.
Frequently asked questions
What is a participatory loan?+
It is a subordinated debt provided by the Monetary and Financial Code (art. L313-13), repaid after all other creditors in case of difficulty, just before shareholders. It is treated as quasi-equity.
Why is it called quasi-equity?+
Because, despite its debt nature, its very low rank in case of difficulty brings it close to capital. It strengthens the financial structure as capital would, without diluting shareholders, and banks integrate it as quasi-equity.
Does the participatory loan dilute capital?+
No. It is one of its major assets: it strengthens equity in the broad sense without bringing in a new shareholder or changing the breakdown of capital, unlike a capital increase.
Is the Relance participatory loan still available?+
No. The PPR scheme, launched in 2021, has been closed since 31 December 2023. It must not be confused with the ordinary participatory loan, which remains an available instrument.
What effect on access to credit?+
By strengthening quasi-equity and therefore ratios, the participatory loan eases the obtaining of complementary bank financing. It plays a primer role, strengthening the balance sheet before a bank loan.
Who is the participatory loan for?+
Companies wanting to strengthen their financial structure without diluting capital, often to unlock bank financing. Like any subordinated financing, it requires a demonstrated repayment capacity.
Key takeaways#
- The participatory loan is a subordinated debt (Monetary Code art. L313-13), repaid just before shareholders.
- It is treated as quasi-equity and strengthens ratios without diluting capital.
- Banks integrate it as quasi-equity, which eases access to credit.
- The Relance participatory loan (PPR) was temporary and has been closed since 31 December 2023.
- Do not confuse the closed PPR with the ordinary participatory loan, still available.
- Like any financing, it requires a demonstrated repayment capacity.
Article written by the Hayot Expertise firm, registered with the Order of Chartered Accountants of Ile-de-France. Updated for 2026. This article is for information purposes and does not replace an analysis of your own situation.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
This topic is part of our service Tax accountant in Paris | CIT, VAT & tax audits
Need a quote or personalised advice?
Our accountancy firm supports you through all your steps. Get a free quote to review your situation and receive a bespoke fee proposal, or contact us directly.