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Ammunition Manufacturing Business Plan: Costs, Licensing & How to Start (2026)

Reviewed by Muhammad Tayyab Shabbir · Published 2 July 2026

A lender-ready breakdown of what it takes to start an ammunition manufacturing company in the US, with the federal rules quoted from the primary text.

$116k-$2.5M
Startup cost, planning range
60 days
Statutory period to approve or deny a license application
FFL Type 06
Before you manufacture
11%
Federal excise tax (FAET)
$0.12-$0.15
Cost per round, reloaded 9mm (planning figure)
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The short answer: starting an ammunition manufacturing company in the US costs anywhere from about $116,000 for a small-batch commercial loader to $1.5 million to $2.5 million for a mid-volume automated plant. Before you can legally sell a single round you need an ATF Federal Firearms License (Type 06). The statute says the Attorney General, who acts through ATF, "must approve or deny an application for a license within the 60-day period beginning on the date it is received" (18 U.S.C. 923(d)(2)); that is a deadline to decide, not a promise of a license. If any product you make is on the U.S. Munitions List, you also need registration with the State Department's Directorate of Defense Trade Controls (DDTC) under ITAR. Zoning, fire code sign-off, build-out and equipment delivery add time that we have not measured. Ammunition you sell is also subject to an 11% federal excise tax administered by the TTB, with a few statutory exemptions such as sales for export, so your financial model has to build that in from day one, not treat it as an afterthought.

Is an ammunition manufacturing company profitable?

It can be, but margins are thin and depend on volume. Reloaded 9mm can run as low as $0.12 to $0.15 per round using recovered brass, against factory-new 9mm retailing around $0.20 to $0.25 per round, while 5.56/.223 retails around $0.40 to $0.50 per round. The gap between your fully-loaded cost per round (components, labor, overhead and the 11% FAET) and wholesale or retail price is where the business lives, and that gap compresses fast when brass, primers or powder spike.

The structural risk is regulatory and input-driven rather than demand-driven: components (primers and brass especially) are periodically scarce and price-volatile, and taxable sales are taxed at 11% of the manufacturer's price under the Firearms and Ammunition Excise Tax (FAET) before you see a cent of margin. A lender or investor will want to see your model stress-tested against a primer or brass price spike and a realistic volume ramp against installed press capacity, not just a best-case per-round margin.

How much does it cost to start an ammunition manufacturing company?

Equipment scales enormously with volume: a bench-scale commercial reloading setup can be assembled for well under $150,000, while a mid-volume plant with automated progressive presses, NFPA-compliant powder and primer storage, and 90 days of component inventory is planned here at $1.5 million to $2.5 million all-in.

Line itemPlanning range
Automated/progressive loading presses (per line)$25,000-$250,000
Component inventory (brass, primers, powder, projectiles, first fill)$25,000-$500,000
Facility lease/build-out & NFPA-compliant magazine storage$40,000-$600,000
ATF FFL Type 06 (three-year license, $10 per year)$30
ITAR/DDTC registration (if a product is on the U.S. Munitions List; new registrant fee, 22 CFR 122.3)$3,000/yr
Quality/pressure & velocity testing equipment$5,000-$20,000
Product liability & property insurance (annual)$6,000-$40,000
Working capital, software & compliance recordkeeping$15,000-$100,000
Sum of the rows for one press line, without the ITAR row$116,030-$1,510,030

The total is the sum of the rows for a single press line; add $3,000 if you must register with DDTC. A plant running several lines repeats the press row and carries more inventory and space, which is how our planning range reaches $2.5 million. The spread is wide on purpose: a small-batch commercial reloader selling a few hundred thousand rounds a year looks nothing like a mid-volume plant running multiple automated lines. Under-budgeting component inventory is an easy mistake to make, since primer and brass shortages can stall production for months if you have not built in a buffer.

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Step by step

How do you start an ammunition manufacturing company?

Step 1

Define your product & scale

Decide which calibers, whether you sell factory-new or remanufactured/reloaded ammunition, and whether you are targeting retail, wholesale/trade, or law-enforcement contracts. Each changes your licensing path and equipment needs.

Step 2

Secure the site & zoning

Confirm the site can be zoned for propellant and primer storage; local fire marshal and building code sign-off on magazine storage is frequently the longest pole in the tent.

Step 3

Apply for your ATF FFL Type 06

This is the Federal Firearms License for manufacturing ammunition (other than armor-piercing or destructive-device ammunition), issued by the ATF. The statute gives the Attorney General 60 days from receipt of the application to approve or deny it, after which the applicant "may file an action under section 1361 of title 28 to compel the Attorney General to act" (18 U.S.C. 923(d)(2)). ATF's Apply for a License page, read from an Internet Archive capture of 5 September 2026, says: "This process will take approximately 60 days from the receipt of a properly completed application." The process includes a background check and site inspection.

Step 4

Register for ITAR with DDTC, if applicable

Since 9 March 2020, U.S. Munitions List Category III has listed particular ammunition and components, for example "Ammunition preassembled into links or belts" and "Primers other than Boxer, Berdan, or shotshell types", and ammunition that is not listed moved to the Commerce Department's control list. If you make a listed item you must register with the State Department's Directorate of Defense Trade Controls and pay its annual fee, even with no exports: "A manufacturer who does not engage in exporting must nevertheless register." Whether your products are listed is a classification question for you and, if in doubt, for DDTC or counsel.

Step 5

Powder & primer storage, and the explosives license

With a few named exceptions, the federal explosives law does not apply to "small arms ammunition and components thereof", and it states no quantity threshold (18 U.S.C. 845(a)(4)); ATF's regulations define ammunition to include primers and smokeless propellants designed for use in small arms, but not black powder. On that definition black powder is not a component covered by the exemption. The statute's separate black powder exemption reaches "commercially manufactured black powder in quantities not to exceed fifty pounds" intended solely for sporting, recreational or cultural use in antique firearms or antique devices, so ask ATF before you buy or store it. An ATF explosives license is required of importers, manufacturers and dealers of explosive materials, black powder included (27 CFR 555.41). OSHA's rule for small arms ammunition, primers and propellants, 29 CFR 1910.109(j), opens with its own scope: "This paragraph does not apply to in-process storage and intraplant transportation during manufacture of small arms ammunition, small arms primers, and smokeless propellants." For stocks that paragraph (j) does cover, smokeless propellant "Quantities in excess of 750 pounds shall be stored in magazines" ((j)(3)(v)), and "Not more than 750,000 small arms ammunition primers shall be stored in any one building" outside magazines ((j)(4)(iv)). Which of your stocks count as in-process is a question for OSHA or a safety professional. State and local fire codes apply as well, so ask the fire marshal or building official.

Step 6

File the federal excise tax return (FAET)

The 11% tax on cartridges and shells is reported to the TTB on the Firearms and Ammunition Excise Tax return (TTB F 5300.26), filed for each calendar quarter in which you owe tax (27 CFR 53.151(a)). It falls on your sale as manufacturer, so price it into every taxable unit. In the TTB documents we read, the one registration is for tax-free sales (TTB Form 5300.28). TTB's fact sheet also says: "The reloading of used casings or shells is an act of manufacture that subjects the reloader to FAET liability upon the sale or taxable use of the shell or cartridge." It excepts a reloader who returns a customer's own casings reloaded.

Step 7

State & local licensing, insurance

Confirm state manufacturer/dealer licensing, business license, sales tax registration, and secure product-liability and property coverage; ask your broker in writing whether the policy covers ammunition products.

Step 8

Install equipment & build demand

Bring presses and testing equipment online, establish quality-control and lot-traceability protocols, and line up wholesale, distributor or direct-to-consumer sales channels to fill capacity.

Regulation

What licenses does an ammunition manufacturing company need?

ATF FFL Type 06

Federal Firearms License for manufacturing ammunition (excluding armor-piercing and destructive-device ammunition). Issued by the ATF; application fee $30, renewed every three years.

ITAR / DDTC registration

Registration with the State Department's Directorate of Defense Trade Controls, required of anyone who manufactures an item on the U.S. Munitions List, whether or not they export. Since 9 March 2020 Category III lists particular ammunition and components instead of all ammunition, so check each product against it; annual fee starting at $3,000 (2025 fee schedule).

Federal explosives license & storage

Issued by the ATF and required of importers, manufacturers and dealers of explosive materials, black powder included. The federal explosives law exempts small arms ammunition and its components, with no quantity stated. OSHA's storage rule for small arms propellants and primers (29 CFR 1910.109(j)) does not apply to in-process storage during manufacture; it applies to other stocks within its scope, and state and local fire codes apply as well.

Firearms & Ammunition Excise Tax (FAET) return

A tax return, not a license: TTB F 5300.26, filed with the Alcohol and Tobacco Tax and Trade Bureau (TTB) for each calendar quarter in which you owe the 11% excise tax on cartridges and shells you sell as manufacturer.

Requirements vary by state and by exactly what you manufacture (loaded ammunition vs. reloading components, calibers, export intent), so the regulatory section of your plan should name the specific licenses, agencies and a dated timeline for your operation.

What must your ammunition manufacturing company business plan contain?

For an SBA loan or an investor, a credible plan includes an executive summary and funding request; a market analysis (calibers, target channels, competing manufacturers, demand drivers); an operations plan (press capacity, daily/annual round output, staffing, quality control and lot traceability); a regulatory plan (FFL Type 06, ITAR/DDTC registration where a product is on the U.S. Munitions List, powder and primer storage and the quarterly excise tax return, with a dated timeline); and a 5-year financial model covering the startup budget, a realistic production-volume ramp net of the 11% excise tax, component-cost sensitivity and break-even.

The model also has to show debt service coverage (DSCR) at the SOP 50 10 8.1 floor for your loan; there is no single SBA figure. For a start-up on a Standard 7(a) loan (greater than $350,000), projections must reflect "a debt service coverage equal to or greater than 1.15 within 2 years from loan funding". A 7(a) Small loan that is not a change of ownership needs 1.10:1, and on projections "the Applicant must demonstrate a debt service coverage equal to or greater than 1.10:1 within one year of loan funding". A 504 loan needs 1.15:1 on historical statements, which a start-up does not have; the 504 chapter adds that if history falls short "the CDC must analyze projections", and states no separate number for them. The lender or CDC applies its own credit analysis on top, so ask what it needs. Our guide to SBA debt service coverage requirements has each rule.

Does an SBA loan for an ammunition manufacturer need a Phase I environmental assessment?

It depends on how your lender reads one bracket in the SBA rulebook, and the rulebook does not settle it. The 2022 NAICS Manual puts establishments "primarily engaged in manufacturing small arms ammunition" in code 332992, and its index draws the line with the entry "Ammunition, small arms (i.e., 30 mm. or less, 1.18 inch or less), manufacturing"; larger ammunition is 332993. The lender and SBA assign the code on the facts; we do not. Both codes begin with 332, and Appendix 6 of SOP 50 10 8.1, the SBA's list of environmentally sensitive industries, prints "332 FABRICATED METAL PRODUCT MANUFACTURING (not required if assembly only)" and says: "A 3 digit NAICS code includes all industries beginning with those 3 digits."

Is loading ammunition "assembly only"? The text leaves that open. The SOP uses those words in seven Appendix 6 entries and we found no definition of them anywhere in it. The NAICS Manual says "The assembling of component parts of manufactured products is considered manufacturing", so on the Manual's wording a loader that only puts purchased cases, primers, powder and bullets together would still be classified in 332, and the bracket is what is left to decide. We do not decide it for your lender. Our reading is only that forming cases, casting or swaging bullets, or plating on site is harder to describe as assembly only than loading purchased components. Making your own propellant is a different entry: the Manual indexes gunpowder manufacturing to 325920, and Appendix 6 prints "325 CHEMICAL MANUFACTURING" with no condition.

What turns on it is where the lender's environmental review starts. SBA requires an Environmental Investigation of "all commercial Property upon which a security interest such as a mortgage, deed of trust, or leasehold deed of trust is offered as security for a loan or debenture", and the lender compares Appendix 6 with "the Property’s current and known prior uses", so a previous occupant's use counts as well. A unit in a Multi-Unit Building is excepted from that step, but the SOP defines one as a "non-industrial, multi-unit building that is comprised of four or more individual units".

On a match the investigation "must begin with a Phase I, regardless of the amount of the loan". With no match, a loan "up to and including $250,000" "may begin with an Environmental Questionnaire", and a larger loan begins with a Questionnaire and a Records Search with Risk Assessment. These are minimums and the lender may ask for more.

Ask your lender how it reads the bracket for your operation and your building before you fix a budget or a closing date. We have not surveyed what a Phase I costs. Our SBA environmental requirements guide covers the steps that follow.

How do you fund an ammunition manufacturing company?

Because ammunition manufacturing is equipment- and inventory-heavy, the SBA 7(a) loan can cover working capital and machinery, with the SBA 504 loan an option if you are also acquiring or building owner-occupied real estate; conventional equipment financing and private capital are alternatives, and it is worth asking early whether a bank lends to firearms-related businesses. Whichever route, build a model that prices in the FAET, survives a component-cost shock and reaches the coverage floor for your loan on a defensible timeline.

FAQ

Frequently asked questions

How much does it cost to start an ammunition manufacturing company?

It ranges from roughly $116,000 for a small-batch commercial reloading operation to $1.5 million to $2.5 million for a mid-volume automated plant with compliant powder and primer storage. Licensing fees themselves are modest; equipment, component inventory and facility build-out drive the total.

Do you need a license to manufacture ammunition?

Yes. Manufacturing ammunition requires an ATF Federal Firearms License Type 06. Registration with the State Department's DDTC under ITAR is required if you make an item on the U.S. Munitions List; since 9 March 2020 Category III lists particular ammunition and components. The federal explosives law exempts small arms ammunition and its components; its license is for importers, manufacturers and dealers of explosive materials, black powder included.

What is the federal excise tax on ammunition?

The Firearms and Ammunition Excise Tax (FAET), administered by the TTB, applies at 11% of the manufacturer's sale price on cartridges and shells. It is reported on TTB Form 5300.26 for each calendar quarter in which tax is owed and funds the Pittman-Robertson Wildlife Restoration program.

Is an ammunition manufacturing company profitable?

It can be, but margins are thin and volume-dependent. Reloaded 9mm can cost $0.12 to $0.15 per round to produce versus $0.20 to $0.25 retail for factory-new, but component price spikes and the 11% excise tax compress that margin quickly if not modeled carefully.

How long does it take to start manufacturing ammunition legally?

There is no single federal clock. By statute, a Type 06 license application must be approved or denied within 60 days of receipt, and ATF's own page, in a 5 September 2026 archive capture, says approximately 60 days from a properly completed application. Zoning, fire code sign-off, facility build-out and equipment delivery come on top, and we have not measured those.

Does an SBA loan for an ammunition manufacturer need a Phase I environmental assessment?

It depends on how the lender reads one condition. Appendix 6 of SBA SOP 50 10 8.1 lists NAICS 332, which holds both ammunition manufacturing codes, as environmentally sensitive unless the operation is assembly only, and the SOP does not define assembly. If the lender finds a match for the property securing the loan, the investigation must begin with a Phase I at any loan amount.

Muhammad Tayyab Shabbir, Founder of Avvale

Reviewed by Muhammad Tayyab Shabbir, Founder of AVVALE. Business Plan Firm is the US practice of Avvale, a London consultancy: 1,000+ plans written for 500+ founders across 30+ countries, for SBA and bank loans, investors and visa applications.

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Sources: Reviewed against primary text retrieved 13 October 2026: SBA SOP 50 10 8.1 (Appendix 6; Section A, Chapter 5, Paragraph E; the environmental definitions in Appendix 4; debt service coverage in Section B, Chapters 1 and 2 and Section C, Chapter 1); the 2022 NAICS Manual (332992, 332993, 325920 and the Sector 31-33 introduction); 18 U.S.C. 923 (license, $10 per year fee, 60-day period and the action to compel); 22 CFR 121.1 Category III, 22 CFR 122.1 and 122.3, and the State Department rule at 85 FR 3819 (effective 9 March 2020); 18 U.S.C. 845, 27 CFR 555.11, 555.41 and 555.141 (explosives exemptions, definition of ammunition and license); 29 CFR 1910.109 (OSHA paragraph (j): scope and storage quantities); 26 U.S.C. 4182 and 4221 (excise tax exemptions), 26 U.S.C. 4181 (the 11% rate) and 16 U.S.C. 669b (wildlife restoration fund); 27 CFR 53.151, TTB F 5300.26, the TTB FAET fact sheet and TTB FAET reference guide (return, reloaders, tax-free registration). atf.gov refuses automated retrieval, so ATF's Apply for a License page was read from an Internet Archive capture of 5 September 2026. Not verified from a primary source and left as planning figures: the cost ranges, per round figures and overall timelines on this page, which drew on trade price lists we did not retrieve for this review. We found no SBA statement on whether loading ammunition is assembly only, and no general excise tax registration in the TTB documents we read. This page is general information, not legal, export-control, tax, lending or environmental advice, and it is not a commitment to lend. Confirm licensing with ATF, U.S. Munitions List classification with DDTC or export counsel, the excise tax with TTB, storage with OSHA and your fire marshal or building official, and loan requirements with your lender or CDC.

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