Companies trading unpaid invoices to get cash for their business is revolutionising the fintech space.

Invoice trading is the alternative way for small businesses to raise cash. Made possible by the rise of the digital network, it is now easier than ever for start-up fintech companies to connect with borrowers, an edge traditionally reserved for banks.

The total online alternative finance market size by model for Australia between 2013 and 2015 shows that invoice trading has the second highest annual growth rate behind balance sheet business lending.

The alternative finance market has expanded exponentially in Australia, growing 320 per cent in the last year to become the third largest market in the Asia-Pacific.

P2P lending and crowdfunding have amassed a large proportion of this inflation behind the top two, which still leaves Australia sitting behind China and New Zealand.

The recent introduction of Crowd-Sourced Equity Funding amendments to the Corporation Act and equity-based crowdfunding platforms will able to be licensed from September. Under these new rules, unlisted companies can raise up to $A5 million per year with a limit of $10,000per investor.