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FFL Licenses 101

FFL Licenses 101

Firearms are some of the most regulated items in the world. As a result, all sorts of bureaucratic and legal requirements are attached to their manufacture, sale, and transfer. 

In the United States specifically, there are specific licenses required to make, sell, or even import firearms from other states. 

Many people who have bought firearms outside of their home state have likely encountered an FFL holder. This begs the questions: what is an FFL, and what does it do? What types are there, and why should you consider getting one? Today we'll look into these questions surrounding FFL licenses.

What is an FFL License?

The Federal Firearms License or FFL's origins are found in the Gun Control Act of 1968. This Act effectively restricted interstate firearm sales to only those who held Federal Firearms Licenses. Essentially, an FFL is a tool used to ensure that manufacturers, sellers, and other gun industry individuals are who they say they are. 

What does an FFL allow you to do?

Depending on its type, an FFL allows the holder to manufacture, sell, transfer, buy, import, or collect firearms in an official capacity. If it is part of your job to do any of those things, you are legally required to hold an FFL. In the same states, an FFL isn't necessarily needed for selling their own purchased guns via private sale, but it’s best to check your state laws if you intend to buy or sell with a private party.

What are the 9 types of FFL Licenses?

There are nine different types of FFL licenses. The individual licenses are Type 1, 2, 3, 6, 7, 8, 9, 10, and 11. These nine different licenses are further broken down into four license categories: 

  • Dealer licenses
  • Manufacturer licenses
  • Importer licenses

Dealer Licenses (Types 1, 2, 3 & 9)

Type 1 (Firearms - other than destructive devices)

A Type 1 licensee can sell and purchase guns as a business and operate as a gunsmith. You cannot deal with destructive devices. However, with a special tax, you may deal or sell Title II NFA items, including machine guns, silencers, and short-barreled rifles/shotguns.

Type 2 (Firearms pawnbroker - other than destructive devices)

A Type 2 licensee may operate as a pawnbroker. This means accepting and reselling firearms in an official capacity.

Type 3 (Collector)

A Type 3 license is the only personal use license on this list. A Type 3 license is for collectors of antique firearms or firearms that are 50+ years old. This license allows the holder, who collects firearm antiques, to have old guns delivered directly rather than go through the painstaking process of background checks and other paperwork on multiple eligible firearms. This license is highly state-dependent.
A Type 3 licensee cannot sell firearms or acquire firearms to resell them. This doesn't mean they can't sell parts of their collection if they choose, but they must only use their Type 3 license for eligible firearms they intend to add to their collection.  

Type 9 (Destructive devices)

A Type 9 licensee may deal in destructive devices. This covers the sale of things like grenade launchers, large-caliber rifles, and similar items. However, a Federal Explosives License is required to sell items that have explosive contents, like flash-bangs.

Manufacturer Licenses (Types 6, 7, & 10)

Type 6 (Ammo manufacturer - excluding destructive devices or armor-piercing ammo)

Type 6 licensees are authorized to manufacture ammunition. This license does not include armor-piercing ammunition or ammunition for destructive devices.  This covers the basic ammunition used in firearms from solid lead to hollow points as long as they do not meet the legal definition for “armor-piercing.”
Suppose you are a reloader and make ammunition for personal use. In that case, you do not need a Type 6 license as this license is for the manufacture of ammunition intended for sale or commercial purposes.

Type 7 (Firearms manufacturer - excluding destructive devices or armor-piercing ammo)

A type 7 license allows for the commercial production and sale of Title I firearms, which are regular legal firearms such as semi-automatic rifles and handguns. Type 7 licensees may also produce and sell Title II firearms, such as machine guns, silencers, short-barreled rifles, etc.
A Type 7 license does not cover destructive devices, ammunition, or armor-piercing ammunition. However, it does allow for the manufacturing and selling of many common firearms and the more common NFA items like suppressors, short-barreled rifles, and machine guns.

Type 10  (Firearms & ammo manufacturer - including destructive devices or armor-piercing ammo)

A type 10 licensee can legally manufacture destructive devices and the ammunition for it and armor-piercing ammunition. However, the manufacturer must also hold a Federal Explosive License to manufacture a destructive device that contains explosives. 

Importer Licenses (Types 8 and 11)

Type 8   (Firearms & ammo importer - excluding destructive devices or armor-piercing ammo)

A Type 8 licensee can import firearms and ammunition classed as Title 1 items (ordinary rifles, pistols, revolvers & shotguns). These firearms cannot be destructive devices, destructive device ammunition, or armor-piercing ammunition. 
Type 8 licensees are also considered dealers, which means that they can import and sell the items they are licensed to deal with.  

Type 11 (Importer of destructive devices or armor-piercing ammo)

A Type 11 license allows the importation and selling of destructive devices, ammunition for destructive devices, and armor-piercing ammunition. The Federal Explosive License also applies to this license for explosive contents. 

Can I get an FFL for personal use?

In short, yes. Licenses, like the Type 3 license, are designed for personal use. You can also acquire licenses for your business, such as a one-person gunsmithing operation for firearms manufacturing.  

If you want to make a side business involving the manufacture or sale of firearms, you will need an FFL. If your main job is manufacturing and selling firearms, you will need an FFL. All of this comes down to whether or not you intend to sell what you make.

You can operate an FFL out of your own home and even be a dealer without having a specialized business location. All you have to do is ensure that it is legal in your area to do so, not be a prohibited person, and have a secure area to store firearms. If you want to have new guns shipped directly to you, a Type 1 license will likely be your go-to. Type 1 licenses are also very for businesses based out of a home. 

To ensure that you are considered a seller of firearms, you must purchase and sell a gun in an official capacity one or more times a year. This similar rule also applies to manufacturers; A manufacturer must make guns with the intent to sell. As long as some of the guns are sold, the licensing requirements have been fulfilled.

Is getting an FFL worth it?

Depending on what you intend to do regularly, yes, an FFL is worth it. If you are an antique gun collector who wants to acquire multiple curios and relics eligible firearms quickly, an FFL is likely worth it.

If you want to be a gunsmith, resell firearms, or manufacture guns for sale, an FFL is needed. If you’re going to manufacture NFA items, an FFL with appropriate SOT is necessary. Type 1 FFL licenses are very common; they create a more direct custody line when it comes to firearms. Instead of adding an FFL holder as your middle man, it allows for firearms to be directly sent to you.

Not every FFL will serve your purposes, especially when it comes to price. Like those dealing with destructive devices and other explosives related items, the more exotic licenses have a substantial initial cost and renewal cost. For example, Type 9, Type 10, and Type 11 licenses have a $3,000 initial fee and a renewal.

Type 3 licensees only require a $30 initial cost and renewal cost, like Type 6 licensees. This makes it easier financially to acquire these FFL statuses. Additionally, Type 1 licenses have a $200 initial cost and a $90 renewal. Type 7 licenses sit at $150 for initial cost and renewal. These prices vary depending on SOTs and other factors that may change over the years and by region.

Determine how much you want to spend on the license and what you'll get out of the license to determine what option is the best for you. 

How long does it take to get an FFL?

Like all things bureaucratic and paperwork related there is the time involved. A would-be FFL has to submit an application and pay the appropriate fee.

If the application is not for a Type 3 license, additional material needs to be submitted, including fingerprint cards, photographs, etc. The application is then reviewed, and an electronic background check will be conducted.

After this, the Federal Firearms Licensing Center’s application will be sent to the nearest ATF field office. The field office will assign an Industry Operator Investigator who will interview the applicant in-person. This may include a site inspection depending on the applicant's location and business. Then they will go over the state, local, and federal requirements to ensure all information on the application is accurate.

The investigator will then submit their report along with their recommendation. The field office supervisor will also review the report. Once all the paperwork is reviewed, all regulations are checked to be followed, and the background checks are cleared, the Federal Firearms Licensing Center will complete the application and issue the license. This entire process from submission to conclusion is approximately 60 days.

Final Thoughts

Be sure to check local laws and restrictions regarding firearms, firearms businesses, and their related requirements before applying for an FFL. If you have any questions or confusion about any aspect of the process, be sure to check official sites and appropriate legal counsel that specializes in these issues.

There are numerous courses and products out there that provide the necessary legal understanding regarding setting up an FFL and related businesses. Be sure to get quality instruction for your state as each state's requirements are different.

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