Ever since Obama proposed new regulations that may require FFL transfers for all gun sales, even those that law abiding gun owners are legally allowed to make everyday, many Americans are asking questions. What type of sales will be legal? Who will handle transfers at gun shows? What about transferring ownership to family members, or giving guns as gifts?
The answers have always been a bit murky. One way some of us who enjoy buying and selling guns are approaching this is to take the plunge and pick up a Federal Firearm License (FFL).
There are as many reasons to get a Federal firearms License as there are gun folks out there. I’ll leave the motivation question behind for a moment. If you are in the gun business–like I am, or want to be, you may benefit from obtaining an FFL of your own. I’m applying for mine now, and here’s some of what I’ve found.
What Are The Requirements of an FFL Holder?
Your responsibilities as an FFL, as per the BATF web page:
- To receive a license as a dealer (including pawnbrokers & gunsmiths), importer, or manufacturer of firearms, you must intend to engage in a firearms business.
- You can expect to be contacted by an ATF officer during the application process.
- You will be required to prepare and keep detailed records of all firearms transactions.
- Your records and premises will be subject to inspection by ATF officers.
- ATF notifies State and local authorities regarding applicants for Federal firearms licenses.
- State laws or local ordinances may require additional licenses or permits for firearms licenses.
- When requested by ATF, licensees are required to furnish information regarding firearms traces.
- Other State or local requirements, such as cash bonds, liability insurance, zoning restrictions, collection of sales taxes, etc., may also apply to your proposed firearms business.
You should contact your State and local authorities for specific information on their requirements.
Firearms licensees should contact the Internal Revenue Service for information regarding business operations and Federal income taxes.
What Type of License Fits?
When it comes to a Federal firearms License, one size does not fit all. The type of license you want depends heavily on what you intend to do with it. Each license has a different cost associated with it as well, so it may benefit you financially to ensure you’re not going overboard. In my case I am planning on getting an 01 FFL, which will allow me to receive guns and transfer guns to other FFL holders, as well as individuals (with the proper forms).
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“But the BATF Won’t Give Me One Because…”
There are tons of supposed BATF restrictions floating around out there: “you must have a storefront,” or “you must be in a zoned commercial area,” or “you can’t operate out of your home,” and “you must have full time retail hours” etc. Like most bureaucratic processes, there are a lot of misconceptions in this area, let me tell you. For instance, according to some research done by FFL123.com, 64% of all FFL’s are home-based. In my home state of Arkansas, 60% of FFL holders are based in a residential area. The facts don’t match up with all the stories out there- do your own research before you blindly accept a restriction second-hand.
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The Real BATF No-Goes
This list has a few restrictions that are easy to understand, and a few that can be a little tricky, although on the surface they appear straightforward.
- Must have a physical address- no P.O. Boxes.
- Must plan on selling guns! (not just ammunition)
- Must be selling guns for a profit (attempting to make a profit)- not just buying guns for yourself.
- Must have business hours (no description of how many) on a weekly basis.
- Must be selling guns outside of gun shows. (“sell” includes “transfers for others”)
- Must be legal to operate from the physical address you’ve listed.
- This means that if you are renting an apartment, your landlord may have a say.
- If you own your home, the city or county could have restrictions on home-based businesses.
- Don’t forget about your Homeowner’s Association- if they have a rule against it, you’re done.
- Cannot be Charged by Information or Under Indictment in any court for a Felony, or any other crime for which the Judge could imprison you for more than one year.
- Cannot be a Fugitive from Justice.
- Cannot be an alien who is Illegally or unlawfully in the United States.
- Must be 21+ years of age.
- Cannot be an unlawful user of, or addicted to, marijuana or any depressant, stimulant or narcotic drug, or any other controlled substance.
- Must not be subject to a Court Order restraining you from Harassing, Stalking, or Threatening your child or an Intimate Partner, or child or Such Partner.
- Must never have been convicted in any court of a Felony, or any other crime for which the Judge could have imprisoned you for more than one year, even if you received a shorter sentence, including probation.
- Cannot have been discharged from the Armed Forces under Dishonorable Conditions.
- Must never have been adjudicated as a Mental Defective, which includes having been adjudicated Incompetent to Manage Your Own Affairs, or been committed to any Mental Institution.
- Must not have renounced United States citizenship.
- Cannot have been convicted in any court of a Misdemeanor Crime of Domestic Violence.
The Right Way to Answer these Questions Truthfully
First of all, never lie; if you do, they will surely find you out. With that said, it’s important to be very sure about what the words in these questions mean. Keep in mind that you will not only fill out the paperwork, you will be interviewed in person by a BATF employee to review your application. So let us look at a keyword here, “profit.” To me, seeking profit means that I’m not just making a buck at some point during the year, but rather, that I am conscious of how much effort I am expending, and how much money I am making in return. I can tell you that $20.00 is about the minimum I would accept for transferring a firearm. I base that $20.00 on the amount of time involved. I don’t have too many friends for whom I would be willing to: receive a box from UPS, unpack, check the paperwork, log into my books, fill out the 4473, do the NIC’s check, log out of my books… for less than $20.00. If I am going to put my money out to order a gun, I will want to make some return on that investment.
What I’m getting at is this: I will set a reasonable fee structure, and I will make reasonable efforts to build a customer base. This will take time, and I think the ATF knows this. Heck, I have to make at least $200.00 before I break even on the license fees! With all this in mind, I sure am doing this to make a profit.
Let me just point out here that GunsAmerica can help you to make a profit. It is easy to set up and is cost effective to reach a huge national and local audience. https://www.gunsamerica.com/Login.aspx?ReturnTo=/Administration/User/Dashboard.aspx
Next, what are some good faith signs vs red flags? For example, if a boy comes to your door to take your daughter out for a date, and he is driving an old windowless van with “Free Hugs Inside” or “Lost Puppy Recovery Team” painted on the sliding door, you are seeing all kinds of red flags. Sure, that’s a bit of a drastic example, but you get my meaning. I would advise taking some or all of the following steps that are applicable to you, if you don’t want the BATF seeing flags that red on you.
- Get a business license, or a letter stating that one is not required.
- Get a letter demonstrating your compliance to applicable zoning laws.
- If you belong to a Homeowner’s Association, have the bi-laws in hand with an approval letter (if needed).
- Obtain a document from your landlord approving your venture.
- Don’t forget about a sales tax permit from the appropriate government agency.
So in an effort to do my due diligence, I looked on the city’s webpage to determine if there was anything prohibiting me from having an FFL out of my home. After carefully studied the information on the city’s webpage. Then I called to confirm my reading of the ordinances, that there was nothing that would stop my plan. The helpful lady on the phone told me that in fact I was correct and there was nothing required based on what I had described to her, in fact I did not even need a business license.
As I was gathering the paperwork together, I decided to go down to the office where I had gotten the verbal approval to request something in writing to have for the examiner. Somehow, I got directed to a different department at which point I ran into a less than helpful public employee who I’m pretty sure believes that all guns are radioactive. She spouted off several things, among which was that she would consider me a gunsmith. As a gunsmith, I was not zoned correctly. If the BATF inquired she would gladly inform them of such. I attempted to logically explain to her the difference between repairing firearms and what I was doing. Logic and reason were clearly lost on her. As I begin to escalate my issue I had a meeting with the city attorney who was able to straighten everything out and even provided me with a business license to present to the BATF for my planned endeavor.
The city attorney was clearly pro-Second Amendment. He forcefully explained to the lady that was standing between me and my FFL he didn’t really care what her opinion was, and that they were going to follow the law, and there was nothing in the law preventing me from getting an FFL.
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You Need Help?
If you search the internet for “home FFL,” you will be greeted by all manner and class of links, which will generally fall into a few categories. You will find discussion on various boards about the process and/or debate about getting an FFL. Next, you will find a few articles on the usual gun blogs with general information about the process. You will also find several companies offering “Home FFL Kits” and support. I wanted to check this out. I went with https://www.ffl123.com/. It was $40.00 for the basic kit, so I paid my 40.00 and away I went.
I found the site to be well organized, and it was easy to skip things I did not have questions about. The advice was helpful on several counts: what to expect in terms of dealing with the BATF interview, how to prepare and what paperwork the examiner would use for the interview.
Honestly, I think I could have done it without spending the $40.00, although the information gained was enough that I don’t regret the expenditure. I will update you on this impression as the process moves forward.
Paperwork
No interaction with the government would be complete without paperwork! So here you go.
- Application: https://www.atf.gov/file/61506/download
- Fingerprint card
- Certificate of Compliance: https://www.atf.gov/file/11776/download
- Passport Picture
- You can order paper forms here: https://www.atf.gov/distribution-center-order-form
An example copy of the 01 application can be found below.
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Timeline
I spoke with a friend who went through this process in 2012. He advised me that 6 months passed from the time he mailed in his paperwork, to the time the FFL was issued and official. I am sending my paperwork off on April 1st, 2016. This will make tracking the progress simple.
I will update you after the interview and receiving my FFL. Wish me luck!
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I applied for my FFL in December of 2015, an inspector was out at my office by march and the license arrived 2 weeks later. The process isn’t as intimidating as it should be, fore as long as your background is clean and your zoning is in order, you’re approved.
My main concern now however is the money. Prior to getting my license I did tons of research, most of it yielding complaints about “new gun margins”, brick and mortar overhead and supplemental sales in acessories. Of course, I figured none of that applied to me because I ” had a plan” and my case would be different.
Fast forward a year later, looking at distributor websites and seeing the good stuff perpetually “allocated”, tons of morning emails from said distributors and 4 transfers under my belt, I’m wondering if holding this license is worth it. Despite 8 years under the blue party , my phone wasn’t ringing off the hook with inquiries nor was fed-ex showing up everyday with incoming firearms.
One thing to keep in mind, doing background checks on non CCW holders is $25 dollars on YOUR part. Turns out it’s a fee to call in. So my slick & sly plan to under cut everyone within 50 miles by charging universal $10 transfer fees was blown out of the sky, as a surprisingly small number of people had CCWs.
My license is an 08 with a us-mil 2 year enhancement on it. So I’ve been looking into creative ways to break ahead but so far I’ve been circling the drain in regards to my overhead.
I’ll be attending isdef 2017 as well as other expos in addition to eye balling a possible DSP registration ($2,250). My last hope is cashing in on the export market. Failing that, I’ll just sit on the license doing occasionally transfers and opt out of renewal.
Please update us. When was your interview? How long total for your FFL issueance?
I applied July 17 and have had no response yet. The ATF site (https://www.atf.gov/firearms/apply-license) says “This will take approximately 60 days” so I am not surprised.
Would love to know what to expect since i have people waiting…
I don’t know what state you’re in, but out in the pacific states inspectors are pulling double duty in other neighboring states. In my state, there are only two investigators for the entire north portion of my state.
When I switched addresses on my license last month, the director/boss/lead(?) Of my state branch told me an inspector wouldn’t be coming and they were going to do a straight re-issue because they have other things going on.
The atf has been really busy lately. That said, six months is a long time. Assuming you’re still waiting.
Had my 01 for 1 1/2, been fun and was fairly easy to get.
Forget about making money if you think your going to buy and sell new guns for the distributors. Most of the whole sale prices are only a few dollars more then the big guys post on here and other sites (GB for instance) last comp I did was $38 “profit” on a $2300 gun ! Any gun with a decent margin is either out of stock or “on allocation” at the distributors-mean they save them for the best customers
Buying and selling used-find a niche,and doing transfers ( I charge $25) you will make a little.
Good article
I am sick to death of this. The Constitution does NOT require a “license” to keep and bear arms–nor does it require a license to buy and sell them–to manufacture them–or to repair them. A license is a privilege granted by the state to carry out some activity–like driving. Driving is not mentioned in the Constitution (no cars in the 18th century) so I guess each state has the right to impose requirements to obtain a license to drive. The Second Amendment specifically addresses the right to keep and bear arms. By implication it also addresses the right to purchase, manufacture or repair them. I am absolutely sure that most Americans in the 18th century did not make their own weapons—the vast majority of them bought them or traded for them. Nobody asked for a license to do so. They just did it in the same way they would buy a carriage or a horse. They didn’t need or want a list of those who owned or traded for weapons…….nearly everyone had one. To impose a license for the purchase and sale of firearms shades the transaction into the “potentially dangerous and illegal” category. It implies that I am not free to sell a legal item to my neighbor–to will my collection of antiques to my son–to purchase something that I can afford and want or need. Tyranny happens incrementally……over time and almost unnoticed until one day it rises up and bights you on your ass. I will buy and sell whatever I please without begging the king for permission to do it.
Wonderful article, thanks for sharing. But your opening statement was never answered. Except where the application asks if you intend to make a profit. I don’t. I guess if Mr. President gets his way, the application will have to be changed. I have entertained the notion of getting my FFL, so I could buy and sell at will, but I see that is not “allowed” with a license. Carrying that forward, I can go ahead and engage in that behavior with the ‘blessings’ of the GOVT. America is a wonderful place, if you enjoy requiring the blessings of the government. No, that is too strong. We are still great, but as was said, “Minority Report” is not far off.
A very nice thing to do for other who are considering becoming an FFL. A friend who had an FFL in one State moved and the town into which he did relocate wouldn’t not allow him to have a business out of his home. A great loss for him. He maybe should’ve check first if it was that important to him.
Some initial investigators are on a power trip and try to throw up roadblocks. Mine told me that I could not use a rented conference room to do transfers, that I needed to rent my own office. Spoke to her boss, he said that they don’t have any say-so as to where you do your transfers. So question what doesn’t sound right or is going to cost you unnecessary spending. My transfer place was in an obviously commercial area, yet she made me go through all the zoning B.S. that delayed me for 2 months. Didn’t help that the zoning people were idiots that didn’t even know their own jobs.
What about the “nanny state” of these 50 united states, NJ. Any special restrictions here.
In NJ I believe you also need a state license fro NJ State Police. They require a letter from the town you live in that it is OK to conduct a Firearms business and two types of security, ie safe and an alarm. Check with the NJSP before you waste your time and money.
Wondering why you would go through ffl123 or similar services. You outlined the process completely and there doesn’t seem to be any value added by paying a 3rd party service. I applied for my FFL in 2/15 and got it in 4/15 with no hassles at all. The process is so simple and straightforward that I didn’t use any outside sources.
Lew, were not all geniuses like you.
You\’ll do fine. Looks to me like you\’ve done your homework. I used FFL123.com to help me get my FFL almost 3 years ago. The whole process took about 6 months to complete. I rent my home, so I had to get approval from my landlord, along with the necessary licensing, but it was a cinch….just takes time. Planning and patience are the key. Like you, my minimum fee is $20, which ensures I stay competitive…and most customers are tickled with the price. One piece of advise I would give for the home based FFL: I make sure to put on my FB page and business cards that I am a non-stocking dealer, which should keep those with bad intention looking elsewhere. There are enough distributors who are friendly to home based dealers, that it really doesn\’t cause any issues. Hope all goes well! :)Bud
Well here’s Luck to you from a fellow Arkansan
BATF might impose regulations on gun transfer, but none of that matters without a gun registry, unless they are keeping records of of gun sales past the 3 day limit. (Within 3 days the FBI, who does back ground check is supposed to destroy the record of purchaser and weapon purchased) So how can they ever really enforce any law like transferring from FFL to FFL ONLY without first passing a federal gun registry. Seems like they are just waisting money again, when they should be trying to stop bad guys getting guns. The kind that come from over the border and across the sea… SMH
I’m going thru the process at this time. I mailed all my paperwork last week of March and saw where they cashed my check the first week of April. I guess it is a waiting game now till the field representative calls me up and sets an appointment to go over all the paperwork.
What (if any) are the penalties for keeping inaccurate records. For instance, having the 4473 filled out properly but not logged in the bound book? At the extreme, what can they (ATF) do to a dealer if they want to? IMO about the worst is just take your license but I’d like to know from other folks what experiences they’ve had.
I got an idea. How about you talk about how it is 100% illegal to take a right turn it into a privaledge then license and tax you for it. Then put in note that the second amendmendment is our ffl license our ccw and any other stupid registration or licensing they might come up with. It’s time to stop complying with illegal laws that are null and void from their conception because they conflict with the Constitution people. Obama is bringing ISIS into your country all the while we are reading fun articles on how to buy and sell guns in a legal manner. WTFU!!!
Every one needs to know that it is the peoples perception of the Constitution that matters no judge or law officer can tell you that a law means some thing. We the people determine what law is saying to us and all officers of law are bound by our perception of the law.
I agree with Jesse, If you really want Freedom, you have stop being a suck-ass sycophant to Totalitarianist controllers by trying to ‘get around’ the insidious Tyranny with your own form of back-door avoidance.
If you ever want to completely exercise your 1st and 2nd/A liberties we have to make it a mission to repeal ALL Previous gun legislation, including having ‘licenses’ to exercise your natural inalienable right to privately engage in free trade which were implemented for only one purpose…to expedite the disarming of potential anti-Totalitarian resistance by the populate, by finding ways to implement agenda laws and administrative mandates to eventually make anyone and everyone they need to restrict a criminal so that they can ‘disarm’ them anytime they ‘feel the need’.
It’s bad enough that according to experts like Law Professor John Baker who exposed the fact that due to a constantly growing overabundance of currently over 4,500 federal crimes and over a Quarter Million rules and regulation that the average American actually commits about three felonies a day- the Unconstitutional penalty of which is permanent eternal disarming of the subject–we now are entering an apparent totally permissive acquiescence to further approach a ‘Minority Report’ agenda to easily disarm us right under our own quasi-enabling noses. New legislation advocating special ‘testing’ and evaluation (like they already do in a few countries) for the competance to be ‘allowed’ to have a gun, even if you are not yet a victim of the anti-constitutional ploy to make permanent gun prohibition a part of your ‘punishment’ for your crime, even though you were deemed ‘paid your dues in full’ and integrated back into socieity once again as a law abiding citizen? Even if you only did a vehiclular homicide, or were in a fight and felony battery and you don’t lose your vehicle or are banned from fighting to defend yourself, and you can still carry a knife, but you can’t have a firearm anymore? And Now you need a licence to do a private Freaking Transaction?!
Where’s the absolute OUTRAGE and snap back on this kind of shit?
It never fails to absolutely stun me how easy people say ‘yeah but people who committed violent crimes shouldn’t be allowed to have guns anymore and gives new meaning to the truth about how stupid most of us really are.
The insurance lobby wasted no time getting an Obama Care REPEAL going in Congress. Yet the Power Elite agenda has been slowly but steadily wiping out your right to possess a firearm and instead of firing our legislators if they don’t stop and reverse this, we look for pusillanimous tail between our legs ways to timidly just temporarily ‘get around’ the tyranny, instead of counter attacking them politically?
And now even Guns America is falling into lock step. I am now seriously disappointed and depressed. But I better get over it. As a wounded warrior that automatically bans me from having a gun if i relate that to a VA provider. I already unintentionally committed one of my three crimes a day by carrying at the VA clinic which prohibits carrying on their premises.
Shame on us all.
Well spoken!
43 days from application to licience. 2 ATF agents spent 2 hours in my home at the interview.
“Must be selling guns outside of gun shows.”
The irony is palpable. I swear, I have heard 15 talking points on this and they all say the intent of gun laws is to curtail sales of guns at gun shows yet the BATF says you cannot have a FFL if you intent is to only sell at Gun Shows.
Great information, I have had the fleeting thought of getting an FFL but like many others I am sure, it was more for my own use and convenience. A key factor in my decision to avoid the FFL was the proviso that the BATF has the right to enter and inspect the premises without warning and without a warrant. I do not engage in any activity that would attract attention or subject me to a search warrant but I am NOT going to give up my 4th Amendment Rights. I know we are very concerned about the 2nd, and it is the 2nd that is under attack but do not think for one second that the government will not use an FFL license as a means to circumvent the 4th Amendment particularly if they ever get a curtail on the 2nd. Perhaps a little Orwellian here, but I seek the erosion of the 1st Amendment every time I turn on the TV. I am not referring to the Freedom of Association and the Freedom of Religion clauses which ironically, are being fettered away via the Freedom of Speech Clause. When the Government decides who you can hire and declares you have the right to “Believe” whatever religion you want but not the right to “Practice” that religious belief because it offends some group skilled in vocalizing their cause . . . . well, next comes the witch-hunt for a scapegoat and 2nd Amendment is already under attack so it is an easy target, then all FFLs have waived the 4th Amendment so start with them to get information on the other 2A types . . . . . Suddenly, it is 1984 and a Pig is in charge.
The BATF never has a right to enter and inspect EVER!!!! Go read some law. It is an illegal organization enforcing illegal laws. Any thing that conflicts with the Constitution is null and void from its conception as not to make the law incompitent and conflicting with itself. Policing power only goes as far as the 10th amendment. Stop complying and teach others how not to comply. This is our last chance. Stop gun control period!
Roy, the issue is not with restriction of ‘Practicing’ your religion. Outside of the government owning the largest single entity equity of about 1/3 of all the land in the Country, Churches are a pretty close second or third, ALSO property tax free! So you can ‘practice’ your religious activity all you want? But, like everything else, the definition of ‘practice’ is the ‘devil’ in the details.
You Constitutionally cannot practice or establish a Theocracy type religion.
And why would anybody in their ‘right mind’ want to establish a theocracy in a Secular nation built on a premise of Free thinking Egalitarian Objective Reasonableness based on the liberty and justice higher Natural law, which is the foundation of American Exceptionalism. Otherwise we’d be a total shitbasket like all the other countries where theocracies rule?
I had an FFL for 11 years between 1980 and 1991 and ran a brick and mortar store. I made little considering the investment because the business was so competitive at that time. I remember Ruger 77’s sold for $179.00 and I would have to sell them for $15.00 over my cost. Leupold 3×9 scopes sold for $89.00. I had a guy bring me his Win. 3030 (after he bought it at Kmart for $1.00 under my price) and wanted me to “fix it” under warranty because it was not as accurate as he thought it should be Handguns were difficult to get and you had to buy all the other junk the wholesaler sold before you would get handgun’s . I would sell the other junk at cost and try and make a little on firearms and ammo. Then you had the customer that wanted free ammo and a sling when he purchased a rifle for $10-$20.00 over cost. Being in business is not what many think it is like. You need to be business oriented not someone that just loves guns. After the first few years I built up a profitable business but when I considered I had $250,000+ in guns (a drop in the bucket today) and related goods I decided it was not worth the hassles. Don’t get me wrong I enjoyed the business and the many nice people I met but not being able to hunt and having little time with your family has its price.
I sold the business for the money I had in inventory and the folks that bought it lasted 13 months and hung it up. From what I see happening today the profit rate seems higher but I also know a dealer that hung it up after 23 years because he could not get stock and folks bitched when he couldn’t get what they wanted. I think the internet has changes the face of business but as what a wise man once said “watch what you wish for”. One thing I can say is the ATF came to check my books once in those 11 years and they called me a couple days ahead of time and told me they were coming. The agent spent about 5 minutes looking through my books and spent the next 2 hrs. bullshitting about the law, hunting and fishing. Great guy who stopped in after that and made some purchases.
What happened to the reply I sent ?
Thanks for the effort and help you have provided. While I was on active duty Iveas required to have an advanced FFL permit that allowed me to make certain firearms. I turned my permit in after I was injured and retired for service. At the time I had control over the 2nd best collection of military firearms. Me developed weapon systems and low level manufsctored alterations to weapons of many nstions. Today I wish I had not ceased operations but being urban I got tired of agents coming by having a drink and talking guns with me. With your help I just may get my FFL once again .
Thsnks
i see no mention of the 03 FFL? surely you know of a lot of people that have these who buy and sell on your site. not everyone gets a dealer FFL.
Darryl I see the 09 That’s the one that used to be Class 03 Title 2 or (automatic) select fire, suppressors, short barreled rifles and shotguns
Curio and Relic.
As a Citizen you have privately owned firearms, these came from several sources and some have no paper trail to you. This is a benifit if the gun grabbers ever get their way with firearms confiscation. When you get your FFL you need to keep your private firearms seperate from those handled as part of the business. Do you have to keep list of the private firearms for BATFE to reconcile against business firearms when they are under the same roof or at separate location?
NO. They must be marked personal , not for sale if you display them in your shop.
I get invited by ATF every 3 years to A legal semenar, I always go ,even though it may cost me A day and A bit of travel , I believe it best to keep up dated with law changes . Plus they have A Q.& A. session with plenty of time to answer all questions.
They give you A ph# for legal ?’s , I use it and always get A black & White answer no grey areas.
I would definitely be interested in finding me some seminars….. and that phone number.