When the client's money comes from a construction loan, you don't invoice the client. You submit a draw request to their lender, the lender sends an inspector, and the money moves a week or two later if everything was in the package. If it wasn't, the request goes back, the inspector comes again, and the subs you've already paid are financed by you for another two weeks. Lenders say most draw delays come from incomplete documentation. This guide is the documentation.
How a lender draw works
The loan funds the job in stages against a draw schedule the lender approved at closing, usually tied to a schedule of values or a milestone list: foundation, framing, dry-in, mechanicals, drywall, finishes, completion. For each draw:
- You submit a request stating what's complete and the amount due.
- The lender orders an inspection to confirm the percentage claimed.
- Title or the lender checks for liens and collects lien waivers from you and your subs.
- Funds are released, to the borrower or directly to you depending on the loan.
Three to five business days for the inspection and a few more for the release is typical when the package is complete. Add a week for every round of missing paper.
The draw package
The lender's own form comes first; the rest supports it. A complete package usually contains:
- The draw request form, signed by the borrower and often by you, stating the draw number, the amount, and the percent complete per line of the schedule of values.
- A cost breakdown showing budget, previously drawn, this draw, and remaining, per line.
- Invoices and receipts for the work and materials in this draw, matched to the lines.
- Lien waivers: conditional progress waivers from you and every sub and supplier paid from the previous draw, and often unconditional waivers for the draw before that. Several states prescribe the exact form.
- Progress photos, dated, of the work claimed.
- Approved change orders that affect the budget or schedule, so the lender's budget matches yours.
- Inspection reports and permits as milestones require them: framing inspection passed, rough mechanicals signed off.
The inspector checks the percentage claimed against the site. A draw request that claims 60% on framing when the inspector sees 45% is cut to 45%, and every later request is read with more suspicion.
Keep the percentages honest with cost
The percent complete per line is easiest to defend when it comes from what the line has actually cost against its budget, not from a walk around the site. Framing budgeted at $21,800 with $16,400 recorded and the sub's final invoice committed at $5,400 is 75% complete by cost and 100% committed, and the request can say so. That means the job's costs have to be on the right lines the week they happen, which is the cost code discipline, and the committed costs have to go into the forecast's remaining to spend when a sub signs, not when they invoice.
The receipts are the bottleneck
The lender wants the receipts and invoices behind every draw line, matched to those lines. A contractor who assembles that from a truck's glovebox the night before the request submits an incomplete package. One whose crew's receipts landed on the job with a cost code the day they were bought exports the draw's period and attaches it. Obra is built for the second case: receipts arrive by WhatsApp, email or photo, are confirmed to the project and category with the image attached, and the period's costs export with their attachments. The lien waivers still come from your subs and the state form; the photos still come from your phone. But the third of the package that takes the longest is already done.
Draws and your own cash
A draw covers work already done; you've paid the framer before the lender pays you. Between the milestone and the release, you carry the job, and every incomplete package extends the carry. On a $218,000 ADU with six draws, two weeks of avoidable delay per draw is three months of financing across the job. Track each release as income on the project the day it lands, so what's left to collect against the contract is a number you can plan payroll around. The progress billing guide covers the schedule side.
Questions people ask
Who submits the draw request, the contractor or the homeowner? Depends on the loan. Many residential construction loans have the borrower submit with the contractor's documentation; some let the contractor submit directly. Ask the lender at closing and get the form then.
What is a draw inspection? A site visit by the lender's inspector to confirm the work claimed in the request is in place. It's scheduled after the request is received, usually within a few business days.
Can I get paid for materials that are on site but not installed? Often yes, as "stored materials," with invoices and photos, and sometimes proof of insurance on them. It's a line on the request form when the lender allows it.
Get the template
The free progress invoice template below carries the same schedule of values a draw package needs — each line's scheduled value, percent complete and balance to finish — with the current draw computed. Enter your email and the download starts right away.