(NewsNation) — Thousands of Americans hold federal licenses to manufacture firearms, but few produce guns, according to a new study by the Violence Policy Center (VPC).

These licenses, known as a type of 07 federal firearms license (FFL), are issued by the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). According to the study, they’re often used to bypass requirements like background checks that apply to unlicensed people. Additionally, license holders can purchase firearms from wholesalers at a discount and in unlimited quantities, according to the study.

By paying extra fees, such as a Special Occupancy Tax, holders can also undercut “restrictive regulations of the National Firearms Act of 1934” such as fully automatic machine guns and firearm silencers.

US sees a dramatic rise in manufacturing licenses

In 1975, the ATF only issued 364 FFLs, which is the basic federal incense required to manufacture guns in America. However, in 2022, the number increased to 18,784 — a more than 5,000% increase.

The study noted that there are nearly five times as many licensed gun manufacturers as there are colleges in the U.S.

The study highlighted that “the most dramatic increase” was when the total number of licenses swelled by 338 percent from 4,293 in 2010 to 18,784 in 2022.

The sure is partially driven by online sites offering kits to private citizens seeking federal licenses for personal use, often for their homes, according to the study.

“Across our nation, nearly 20,000 Americans possess a federal license to manufacture firearms. Yet little is known about how these license holders are actually using the powers associated with the license,” Josh Sugarmann, VPC’s executive director, said in a press release.

He added: “We know the vast majority aren’t actually manufacturing guns, so what are they doing? It’s long past time for the federal government, local communities, and their fellow citizens to find out.”

Gun dealers required to run more background checks

Last month, the Biden administration announced a new rule requiring thousands more firearms dealers across the U.S. to run background checks on buyers at gun shows or other places outside brick-and-mortar stores.

The rule aims to close a loophole that has allowed tens of thousands of guns to be sold every year by unlicensed dealers who do not perform background checks to ensure the potential buyer is not legally prohibited from having a firearm. Gun rights groups are expected to fight it in court.

There are already roughly 80,000 federally licensed firearms dealers, The Associated Press reports. Officials believe the new rule will impact more than 20,000 dealers who have gotten away with selling firearms without a license and performing background checks at places like gun shows and over the internet by claiming they aren’t “engaged in the business” of firearm sales.

“Everybody can see that people are not following the law in significant numbers. And it’s just wrong for public safety, it’s wrong for fairness when all these licensed dealers are out there following the rules, for people to think that they don’t have to all play by the same set of rules,” ATF Director Steve Dettelbach told The Associated Press.

The Associated Press contributed to this report.