In modern business, companies dealing with exports often fail to agree on the payment of export goods, which brings significant financial risks and difficulties related to business liquidity, and for this reason such companies use factoring. Factoring, one of the methods of alternative financing, is increasingly popular in business operations. Factoring is an intermediary that provides companies with cash or financing by purchasing their receivables. It can also be stated that factoring is a method of collecting money through the sale of receivables or the transfer of ownership over them. Like any other way of financing, factoring has its advantages and disadvantages. When we talk about advantages, we are talking about the fact that the company that sells its receivables immediately receives cash, which can help finance its business operations or improve working capital. It can be said that factoring, as a type of financing, shortens the receivables collection cycle and provides quick realization of cash through the sale of receivables. Namely, greater company liquidity sometimes becomes a decisive factor in competitiveness and can be directed towards operations and financial planning, which opens up the possibility of future growth, increased sales and a better position on the market. As a disadvantage, it can be stated that in some cases the factor charges interest for the advance made, thus reducing the company's earnings. Although factoring offers many services, it cannot be said that it is a perfect source of financing for companies. A company should carefully assess business needs because taking a factoring advance without proper consideration can negatively impact business profitability and customer relationships. Today, factoring is mostly used by small and medium-sized companies that have a large number of claims of smaller value. In addition to factoring, companies have the option of transferring the risk of collection of export work to a third party through forfaiting. Forfaiting is a financial business in which the exporter sells its outstanding receivables for sold goods or services on credit before the due date of the sales charge to a financial institution called the forfeitor, whereby the forfeitor waives the right of recourse against the exporter. Forfaiting as a form of medium-term financing of trade deals finances the export of goods and services on credit with a maturity of one to five years. Furthermore, factoring is applicable to domestic and international trade while forfaiting largely covers only international trade. Factoring deals with short-term receivables and for this reason the maturity date is equal to or less than 3 months. Forfaiting deals with medium and long-term receivables, so the maturity date is longer. Factoring involves the sale of receivables for consumer goods. The goal of this thesis is to bring factoring closer to international business. The first part will deal with its advantages, disadvantages, legal regulations and the difference from forfaiting. The second part will explain the difference between recourse and non-recourse factoring, as well as advance factoring and maturity factoring. The third part will deal with the development of factoring in international business and the best factoring companies. The importance of factoring will be supported by statistical data and the specifics of the global representative body for factoring, which is Factor Chain International, will be stated. In the fourth part, factoring in the Republic of Croatia will be referred to, that is, the history of factoring in Croatia, the number of active companies, and their financial analysis will be made.