How the VA Will Fund Your Business Through VR&E (Not Just Your Education)
Most veterans who've heard of Veteran Readiness and Employment (commonly called VR&E or Chapter 31) think of it as a college funding or skills training program. And yeah, it isn’t not a skills training program. The vast majority of the roughly 130,000 veterans enrolled in VR&E every year do use it to pursue degrees or vocational training. But there's a track inside the program that no one ever seems to know about, but for the right veteran, it could be worth far more than just tuition. The Self-Employment Track doesn't just pay for your education; it can fund the launch of an entire business. It’s kind of like the VA’s version of “Shark Tank.”
The VR&E Self-Employment Track
Under Track 3 of the VR&E program, eligible veterans with a service-connected disability and an employment barrier can receive comprehensive support to develop and launch a self-employment venture. It’s as simple as that. And yes, it can even include startup capital. Whether you need professional assistance with developing a business plan, require licenses or certifications, need tools and equipment, inventory, specialized training, mentorship, or initial operating capital (capital = money), Track 3 is where you get it from the VA. Like any other VR&E participant, Track 3 veterans also receive a monthly subsistence allowance akin to the GI Bill's housing allowance. That is to say, “all this and you get paid, too.” The key barrier to entry is that the veteran must have a service-connected disability that makes it difficult to find meaningful employment. All you have to do is enroll in VR&E and work with a Vocational Rehabilitation Counselor (VRC). This is your Shark. They determine if the Self-Employment Track is the right fit—and they don't approve Self-Employment just because you want it. VRCs approve only when the veteran has a credible business concept, the relevant skills or background to execute it, and when traditional employment is genuinely constrained by their disability. If you don’t know what you’re doing when it comes to starting a business, guess what: you aren’t alone. Most of us fumble through opening our first business (I sure did). But Track 3 veterans have access to mentorship and guidance through the VA’s established partnership with the SBA's Office of Veterans Business Development.
Federal Contracting Opportunities
Launching a business is only the first step. Veterans with a disability rating (even a rating as low as 0%) and own at least 51% of a business may qualify for certification as a Service-Disabled Veteran-Owned Small Business (SDVOSB). That certification gives a business a federal contracting advantage. Federal law requires the government to award at least 5% of all federal contracting dollars to SDVOSBs each year. InFY2025, federal agencies awarded $28.6 billion across approximately 52,000 contract actions to SDVOSB-certified firms. The VA alone awards roughly 23% of its contracts to service-disabled veteran-owned businesses.
SDVOSB certification, which moved in 2023 to the SBA's Veteran Small Business Certification (VetCert) program, allows certified businesses to compete for set-aside contracts where only SDVOSBs can bid, and for sole-source awards up to $5 million for services and $10 million for manufacturing where there's no competitive bidding at all. Certification as a SDVOSB can turn a VA-funded startup into a firm with a built-in access advantage to billions of dollars in federal contracts.
VR&E for TDIU Veterans
If you're rated at 100% through Total Disability Individual Unemployability (TDIU) rather than a 100% rating, the VR&E Self-Employment Track carries a financial risk.TDIU is granted because the VA has determined you're unable to maintain substantially gainful employment due to your service-connected disabilities. If your business income exceeds the "substantially gainful employment" threshold (approximately $15,650 per year as of 2025), the VA may determine you're in fact capable of gainful employment and terminate your TDIU status. That would mean a loss of the 100% compensation rate and all the benefits that accompany it, including free VA health care, dependents' benefits, and property tax exemptions in many states.
Veterans with a 100% disability rating (meaning the rating was assigned based on the combined disability schedule alone, not unemployability) face no restriction. They can earn any amount of business income without affecting their compensation.
If you're on TDIU and considering the Self-Employment Track, consult a VA-accredited attorney or claims agent before proceeding.
Hello, Sharks!
The first step is to apply for VR&E benefits with a VA Form 28-1900. If you already have a disability rating, you can apply online immediately. If you're still on active duty and haven't received a rating yet, you can still apply. Once accepted, you attend an orientation and are assigned a Vocational Rehabilitation Counselor (the VRC—your Shark) who'll evaluate which of the program's five tracks fits your situation.
Coming in with a business concept already developed, or at least a clear idea of what you want to build and proof of why traditional employment doesn't work for you, will strengthen the case for approval on the Self-Employment Track.
VR&E is one of the most underutilized programs in the entire VA benefits system. And Track 3 is the most underutilized track of VR&E. Veterans who qualify for it don't know it even exists, and those who do often don't realize how far the funding goes.
