Find out which one you have
Interest-bearing: the agreement quotes a rate per period and the balance reduces as you pay. Repaying early reduces the interest that would have accrued.
Factor-rate: the agreement quotes a multiplier and a total repayment amount fixed at the outset. Paying it sooner simply means paying the same total faster.
The word to look for is not 'interest' in the marketing but the presence of a stated total repayment figure. If the contract tells you exactly what you will repay in dollars on day one, it is not accruing.
Early-payoff discounts, and how to ask
Many factor-rate funders will discount for early settlement even though the contract does not require it. It is discretionary, which means it has to be asked for and it is negotiable.
Ask for a settlement figure in writing before you send anything, and ask what it is if you settle this week rather than next. The answer is often better than the contract implies.
Do not simply overpay the debit and assume it shortens the term. On a fixed-total agreement it usually does not.
Prepayment penalties
Interest-bearing facilities sometimes carry a prepayment penalty that removes most of the saving. Check for it before planning around an early payoff.
Where both exist — a penalty and a discount — get both figures in writing and compare. The arithmetic is rarely intuitive.