The pandemic has impacted significantly on the VCSE sector, with many organisations requiring grants/investments for a variety of purposes - to pivot business models, diversify income streams, shift to remote service delivery, and also refinance short-term/inflexible debt. The Social Investment Business's research has found that 81% of social enterprises and charities are looking to identify alternative sources of income in the year ahead, 29% are providing new products or services, and 54% are planning to increase their use of digital systems.

The Recovery Loan Fund is a continuation of the Resilience and Recovery Loan fund - a fund set-up during Covid-19 which raised and dispersed £20m+ within a matter of months to provide liquidity to the VCSE sector as it grappled with the impact of Covid-19. The RLF will be used in much the same way as the RRLF: unsecured funding for a variety of purposes, including supporting charities to shift to online delivery whilst face-to-face interaction was limited, providing working capital and funding for Capex (e.g. essential maintenance), and supporting the development of new revenue streams.