Sometimes such a transaction might take place at a guns show, ergo the term "gun show loophole."
In other words there is no loophole. If they are dealers, you have to do the normal check. If they are individuals, you don’t just the same as buying one from your neighbor. If you purchase a gun off the internet, it must be shipped to an FFL dealer, and you of course fill out the same forms and are subject to the same instant check. I get tired of the idiots talking about a gun show loophole, and that you can just order guns off the internet “no questions asked”. It’s utter BS. I’ve done all the above, on both sides of the counter, too.
Correct, it is the private transfer.
I would add that laws designed to “close the loophole” make it a felony to loan a weapon, have someone keep a weapon for you, etc. without going through a federal firearms dealer ($25-50 fee) on both ends of the transaction.
In fact, if I have firearm in my truck and loan the truck to my brother without removing the firearm, one or both of us would be guilty of a felony, per the new proposed law.
If my brother wanted to leave his pistol at my house, while he ran onto the local Naval Base (gun free zone), that would be a felony. If you and I went skeet shooting and you forgot one of your shotguns under my backseat, that would be a felony. If my father gave me the first rifle I killed a deer with, and we didn’t go through an FFL, it would be a felony.
That is the full extent of “fixing” the gun show loophole.