The first applications of factoring is seen as the "conveyance of receivable" in the B.C.4000’s. in Mesopotamia. After that, it is known that the word factor is used with the meaning that "representative, person who follows the commercial transactions of another person" in the Roman period. Stating the factor as the buyer of the goods on the bill of lading in the 18th century is the starting of taking part of the word factor on the legal documents with its original usage in Flemish in the international commerce. Factoring is used in the textile sector for the first time in the frame of current description, as the European textile producers

started to sell their goods directly instead of through brokers in the end of the 19th century.

Modern Factoring started to be adapted in Europe after the World War II and to be used widely in 1960’s. Factoring, which is considered as the "lender of last resort" in the beginning, is considered as an inevitable financing technique within the course of time thanks to the services provided.

Factoring started in the year 1988 in Turkey and an authorized factoring company started operations in 1990’s for the first time.