I have had an FFl since '68. Up until about 15 years ago, pretty much anyone could get an FFL, and buy guns direct, maybe sell a few to their friends. Then BATF decided they could cut down on the number of FFls buy requiring that holders need to be in compliance with all zoning regulations, and certify this on license applications and renewals. Even need to be fingerprinted and signed off by your local police dept. This, of course cut way back on FFLs. Since that time you have to meet all these requirements. There were a lot of part time gunsmiths, and most if not all started out that way, who had to give up their licenses. One that I know told me he just saved the cost of the license. The basic law is that if you have the firearm in your care (home shop etc.) overnight, you need an FFL and must enter this firearm in your Bound Records (name address serial no, etc, etc) There is no mention of part time, hobby, etc.
The American Custom Gunmaker's Guild at this time worked to see if we could get a separate Gunsmith's FFL so those that could not get a regular license, could be legal. I was the point person on this issue. I wrote to BATF and asked then about a Gunsmiths license, and BATF replied they were in favor of a separate license, but it would take a change to Gun Control '68 to do this. I still have the original letter. And I should clear up what a Gunsmiths license would allow, you would not be able to do transfers (sales), otherwise you get an 01 FFL. I attempted to get NRA/ILA to help get the ball rolling, should be pretty easy, eh? I could not even get a written reply from NRA/ILA, and I tried a few times as the Directors changed. So I eventually gave up. Fast forward, as the say, and a few years ago I got a call from an NRA/ILA person wondering if we were still interested in the issue. Sure I said, but the person there also asked another for opinion on the Gunsmith's FFL and I guess was advised it was not a good idea, so the issue is dead. It truly is a shame that even with BATF's positive opinion, it won't get done.
Do remember that the full time gunsmith has to pay for this license, has to meet all local zoning regulations and do all the record keeping this FFL entails, he has to have an alarm system, safes, probably a local business license, Liability and theft insurance, and the list goes on. And he has to pay taxes on what he makes. I started out as a part timer but have been full time since 74, I am 70 and am cutting back but want to continue with MY WORK, but I cannot get a license to work part time out of my home. Sorry for the rant, but maybe this describes the real world of FFLs