Factoring is a short-term form of financing in which receivables for goods sold or services rendered are purchased before maturity. Factoring is concluded by signing a factoring contract between the parties, that is, a contract by which the seller of the invoice sells his receivables from the debtor that arose from the performance of a certain service or delivery of goods. In the Republic of Croatia, factoring is defined by the Factoring Act and is intended for all legal entities that have short-term claims but cannot classically collect them by borrowing or taking out a loan. The paper will explain the concept of factoring, the advantages and disadvantages of factoring, and the legislative framework and will analyze the indicators that show the state of development of factoring in Croatia. The subject of this paper is the analysis of the factoring market in the Republic of Croatia and the presentation of significant statistical reports on the factoring market in the period from 2017 to 2021. The primary goal of this work is to investigate the Croatian factoring market, to show how the market is regulated and what is the perspective of factoring in the Republic of Croatia, to assess the importance of factoring in the Republic of Croatia.