Due to the impossibility of financing with one of the basic sources of financing, in times of crisis, entrepreneurs are more inclined to use some of the alternative sources of financing, one of which is factoring. In this case, factoring can prove to be one of the very good options for collecting at least part of the receivables to avoid the impossibility of collecting the entire amount of receivables, but in practice factoring is actually relatively rarely used. The problem of this paper can be defined as insufficient use and understanding of factoring as a way of financing in the Republic of Croatia. One of the basic goals of the paper is the conceptual definition and definition of factoring as one of the sources of financing for entrepreneurs and the presentation of the area of application of factoring in practice. In the Republic of Croatia, there is a visible trend of growth in the number of factoring companies during the last economic crisis, but after the end of the economic crisis, the number of factoring companies decreased. When it comes to trends, it is evident that factoring in the Republic of Croatia was primarily used during the economic crisis and a few years later, while since 2017 there has been a sharp decline in the use of factoring. This fact is shown by the movement of the number of factoring companies, which were the most during the economic crisis, while today there are only four. Although factoring is not sufficiently known to the public as some traditional sources of financing, Croatian entrepreneurs more than the EU-27 average state that factoring is a relevant source of financing, that they have used it in the past or that they will use it in the future.