Draw schedule
A draw schedule is a payment plan that releases funds in stages, called draws, as a construction project reaches agreed milestones.
Lenders and owners use draw schedules so money follows progress. Each draw is requested with documentation of the work completed, then approved and paid.
Example
A home build has five draws: foundation, framing, rough-ins, drywall and finishes, each 20 percent of the contract. The builder requests the framing draw only after the framing inspection passes.
Common mistake
Agreeing to draws that ignore your cost curve. If early stages carry most of your costs but a small share of the draws, you finance the job yourself.
How to use it
Negotiate draws that match when your costs actually land, and submit complete documentation with every request.
How a draw request works
Each draw request usually includes an updated schedule of values, invoices or sworn statements from subcontractors, lien waivers for work already paid, and sometimes photos or an inspection report. The lender or owner reviews the package, verifies progress, then releases the funds. Incomplete paperwork is the most common reason draws are delayed, so a standard request package prepared in advance saves weeks over a project.
Draw schedules and cash flow
The gap between paying for work and receiving the draw is where construction cash pressure lives. Materials and labor go out weeks before the draw arrives, and retainage may hold back part of each payment. Map your expected costs against the draw schedule before signing, and keep a cash plan for the gap. Our retainage glossary entry covers the held-back portion.
Draw schedules vs progress billing
The two are closely related. Progress billing is the contractor invoicing for work completed against the schedule of values; a draw schedule is the agreed plan under which those invoices are submitted and paid, often set by a lender. In practice each draw follows a progress bill. Our progress billing glossary entry covers the invoicing side.
Keeping draws moving
Draws stall on missing documents, unpaid subcontractor questions and inspections that were never booked. Keep a checklist per draw: approved schedule of values, current lien waivers, inspection sign-offs and subcontractor paperwork. Submit the package the day a milestone is met rather than batching requests, and reconcile each draw to the job's costs as it arrives so the books always show what is still owed on the project.