This paper aims to explain the development of the factoring business in the Republic of Croatia. The master thesis starts with the basic terms regarding factoring, its characteristics, types and positive and negative sides. Later on, it explains how the factoring market in the Republic of Croatia developed and how factoring became a standard service in the Croatian market. As the years gone by many financial institutions and banks engaged in the alternative mode of financing which is factoring, making the factoring market in the Republic of Croatia grow on a yearly basis until it began to decline. Firstly, it declined because of the new regulation which influenced badly on certain institutions engaged in the factoring business, and secondly because the crisis that took place inside the “Agrokor” concern given the fact that the factoring business in the Republic of Croatia was largely focused on financing the concern. The author in this paper graphically presents the information about the changes on the Croatian factoring market through several different indices in a period of 10 years, starting with the year 2007 and finishing with the year 2017. On the very end, perspectives of the factoring business in Croatia are discussed which explain how the factoring market will look and behave in the future considering the changes that had happened.