The federal government is legally required to give 5% of all its contracting dollars to Service-Disabled Veteran-Owned Small Businesses. In FY2025, that came to $28.6 billion across 52,000 contract actions.
Very few businesses are certified to compete for it.
Compare that to the 18 million veterans in this country, or the millions of businesses competing for ordinary commercial contracts. The math is obviously good. Most veterans starting a business have no idea this lane exists — and even fewer know how to enter it.
Here’s the stack.
SDVOSB vs. VOSB: Which One Are You?
Two programs. One bigger than the other.
VOSB (Veteran-Owned Small Business) is available to any veteran who owns and controls at least 51% of the business. Service required. Discharge status matters — you need an other-than-dishonorable discharge to qualify.
SDVOSB (Service-Disabled Veteran-Owned Small Business) requires the same ownership threshold, but the veteran must also have a service-connected disability rating from the VA. Doesn’t matter if it’s 10% or 100% — any rating qualifies. This is the designation that unlocks the 5% federal set-aside mandate.
VOSB gets preference in some agency-specific programs. SDVOSB gets the federal law behind it.
If you have a disability rating, you want SDVOSB. There is no reason to settle for less.
How to Get Certified
The SBA owns the certification process. You apply at certifications.sba.gov (the old veterans.certify.sba.gov address redirects there).
One critical update: as of December 22, 2024, self-certification is gone. You cannot bid on SDVOSB set-aside contracts without SBA certification. Full stop. No exceptions. If you haven’t applied yet, that’s the first thing on your list.
You’ll need:
- DD-214 (or equivalent separation document)
- VA disability rating letter
- Business formation documents (articles of incorporation, operating agreement, etc.)
- Proof of 51%+ ownership and control — this is where applications die, so document it thoroughly
Processing now averages around 12 days, down from 81 days at the end of 2024. Apply before you need it — not when a contract opportunity surfaces.
Federal Contracting: How the Set-Aside Actually Works
The 5% mandate was raised from 3% by the National Defense Authorization Act for FY2024. Congress directs federal agencies to hit that target annually across prime and subcontracts. In FY2025, federal agencies awarded $28.6 billion to SDVOSB firms — making it the second-largest set-aside category by dollar volume across all federal small business programs.
Here’s what it means in practice: when a contracting officer has a requirement that could be filled by an SDVOSB, they’re supposed to set the contract aside for SDVOSB competition first. You’re not competing against Lockheed Martin. You’re competing against a smaller pool of certified veteran businesses.
The 5% mandate exists specifically because veteran-owned businesses were losing contracts to non-veteran firms on equal bids. SDVOSB certification is a legal competitive advantage written into federal procurement law. That’s worth sitting with for a moment.
SAM.gov is where you find the work. Register your business there — it’s free and required for any federal contract. Once you’re in, search active solicitations and filter by set-aside type. Look for “SDVOSB Set-Aside” in the set-aside field.
A few practical notes:
- Get a NAICS code that accurately describes your work. Contracts are categorized by NAICS, and you need to match.
- “Sole source” awards exist — contracts the government can award directly to a single SDVOSB without competition, up to certain dollar thresholds. They’re worth hunting. A September 2025 FAR overhaul also made it easier for contracting officers to transition follow-on contracts from other programs into SDVOSB set-asides.
- Build a Capability Statement — a one-page document that functions like a resume for your business. Contracting officers ask for them constantly. Have one ready before you approach any agency.
On DOGE and federal contracting: SDVOSB set-asides have remained largely intact through federal budget actions in 2025. The mandate is statutory — it requires an act of Congress to change. Women-owned and minority-owned programs took a harder hit. The veteran set-aside lane is more stable than most.
SBA Boots to Business: Free Entrepreneurship Training
The SBA runs a program called Boots to Business specifically for transitioning service members and veterans. It’s free.
The core offering is a two-day introduction to entrepreneurship delivered through the Transition Assistance Program (TAP) at installations worldwide. There’s also an online follow-on course called “Revenue Readiness” — delivered through Mississippi State University — that goes deeper into business planning, financials, and market analysis.
You don’t have to be transitioning right now to access it. Veterans can enroll in the online version regardless of when they separated.
Find it at sba.gov/sba-learning-platform/boots-business. The program has trained more than 241,000 service members, veterans, and military spouses since 2013.
This isn’t a sales pitch for SBA services. It’s a structured curriculum that forces you to pressure-test a business idea before you spend money on it.
SBA Veterans Advantage: Cheaper Loans
If you’re financing through the SBA, the Veterans Advantage program cuts guarantee fees on 7(a) loans.
Standard SBA 7(a) loans carry an upfront guarantee fee — typically 2–3.5% of the guaranteed portion of the loan. Under Veterans Advantage (active through fiscal year 2026), that fee drops to 0% for qualifying veteran-owned businesses on loans up to $500,000. On a $300,000 loan, you’re looking at saving $6,000–$9,000 upfront versus a non-veteran borrower.
To access it: work with an SBA-preferred lender, tell them you qualify for Veterans Advantage, and make sure it’s applied. It doesn’t happen automatically. Ask specifically.
The SBA 504 loan program — used for commercial real estate and major equipment — has separate terms and less consistent fee reductions for veterans. If you’re looking at a 504, ask your lender directly what’s available.
Free Incubators and Accelerators Worth Knowing
Beyond the federal programs, two organizations do serious work with veteran entrepreneurs.
Bunker Labs (now fully integrated into the D’Aniello Institute for Veterans and Military Families at Syracuse University after a 2024 merger) runs several programs under the IVMF umbrella:
- Military Founders Lab — a 10-week virtual program for early-stage veteran and military-spouse entrepreneurs, with three cohorts annually (winter, spring, fall). Replaced the earlier Veterans in Residence format.
- CEOcircle — a 13-month cohort for veteran business owners with revenue, focused on scaling. Competitive to get in. No equity taken.
- Veteran EDGE — a three-day in-person growth conference for founders past the launch stage.
IVMF also runs the Entrepreneurship Bootcamp for Veterans (EBV) — a competitive, no-cost intensive held at university campuses. Application-based and cohort-driven.
Both connect you with veteran peers who are further along than you. That network has real value.
Franchising: VetFran and Fee Waivers
If you’re considering a franchise, the VetFran program (run by the International Franchise Association) has over 600 member companies — more than 500 of which offer discounts on franchise fees to honorably discharged veterans. The discount amount varies by franchisor but typically ranges from 10–15% off the initial franchise fee.
Veterans make up 14% of all franchisees in the U.S. despite being 7% of the population. The model works well for the same reasons military service does: systems, accountability, and executing a proven playbook.
Search the VetFran directory at vetfran.org to see which companies offer discounts and what the terms are.
State-Level Programs: Don’t Skip These
Every state has some version of veteran business preference. The details vary significantly.
Some states run their own set-aside programs that mirror the federal model — reserving a percentage of state contracts for veteran-owned businesses. Others offer reduced licensing fees, priority access to state procurement, or dedicated small business development resources for veterans.
Look up your state’s Department of Veterans Affairs website and your state’s small business development center (SBDC). The SBDC network is federally funded and provides free consulting — some centers have staff specifically focused on veteran-owned businesses.
The federal set-aside gets the headlines, but state contracts can be easier to win when you’re starting out. Smaller dollar amounts, less competition, faster cycles.
The One Mistake That Costs Veterans the Most
Bidding on contracts before getting certified.
It sounds obvious. It happens constantly.
A veteran finds a set-aside contract, decides to bid without certification, assumes they can certify later or that it doesn’t matter for this particular opportunity. It does matter. An SDVOSB set-aside can only be awarded to a certified SDVOSB. Bidding uncertified is a disqualifying error, not a paperwork technicality. And as of December 2024, there is no self-certification fallback.
Certify first. Bid second.
Start Here
If you have a service-connected disability rating and you’re serious about running a business, the sequence is:
- Apply for SDVOSB certification at certifications.sba.gov — do this now, not when you need it
- Register in SAM.gov at sam.gov — required for any federal contract; also register in the Dynamic Small Business Search (DSBS) so contracting officers can find you
- Take Boots to Business if you’re still building your business concept — free and structured
- Write a Capability Statement — one page, what you do, what contracts you’re suited for, your NAICS codes
- Search active solicitations on SAM.gov filtered to SDVOSB set-asides in your category
$28.6 billion in SDVOSB contracts were awarded last year. A fraction of eligible veterans were certified to compete.
Get certified.
Eligibility details and program terms change. Verify current requirements at sba.gov and sam.gov before applying.
Information verified as of April 2, 2026. SBA program details and set-aside percentages change — confirm current certification requirements at sba.gov/federal-contracting/contracting-assistance-programs/veteran-contracting-assistance-programs.