Construction loan draw schedules control how funds move from your lender to your project. Many first-time borrowers approach this process without learning key timing strategies. This can slow projects down and create cash flow gaps mid-construction.
At Groundfloor Lending, we've supported thousands of new construction loans. We've seen a clear pattern: the borrowers who master their funding timing finish faster and avoid costly project stalls. Success isn't only about knowing when to request draws. It's also essential to understand how lenders verify project progress and release funds.
This guide explains how construction draw schedules work, how inspections affect funding, and how to time your requests to protect your project budget and project timeline.
What Is a Construction Loan Draw Schedule?
A construction loan draw schedule is your project’s funding roadmap. It lists when you can access a loan amount based on completed milestones at the construction site. Unlike a traditional mortgage, construction financing releases the total loan amount in stages as work progresses.
Each draw acts like a checkpoint. Your lender verifies project status before releasing the next installment. This process protects both you and the lender by sending funds only as real value is created in real estate.
Most draw schedules follow similar phases, but timing and requirements vary by lender. Private lenders like Groundfloor may offer more flexible schedules than traditional banks, which helps experienced project teams on unique or time-sensitive builds.
Every schedule includes: Draw number and percentage (often 4 to 6 draws, each about 15% to 25% of the total loan amount), Completion milestone (specific work that must be finished before a release), Documentation requirements (invoices, progress photos, and inspection reports), and Processing timeline (how long the lender needs to review and fund).
Many borrowers don't realize that draw schedules are negotiable during the loan approval process. Experienced developers align their draw timing with contractor payment cycles, material deliveries, and their overall project budget. A strong credit score and solid tax returns can also influence the approval process and your loan options.
How a Construction Draw Schedule Works in Practice
Construction draw schedules run on a milestone system tied to physical progress.
A Typical Approval Process
Complete the milestone per the approved plans. Submit a draw request with invoices and progress photos. The lender schedules an inspection, usually within 3 to 5 business days. After approval, funds are sent within about 24 to 48 hours.
This real time approach keeps general contractors and project teams on schedule. Using a gantt chart can help your team members track construction progress and stay on track with the construction process.
The Inspection Process Explained
Inspections focus on three key areas: completion percentage, quality, and budget alignment. The inspector compares actual progress to your approved plans and project timeline. Most residential inspections take 30 to 60 minutes. Larger or more complex projects can take longer.
Inspectors capture photos and submit a report to underwriting. Using qualified third parties who understand construction details helps speed up the loan approval process.
Typical Construction Loan Draw Schedule Breakdown
Note: This is a sample construction loan draw schedule for illustration. Actual milestones, percentages, and steps vary by lender and loan terms. Standard schedules often include five or six releases to help you plan contractor payments and material purchases.
Draw 1: Foundation and Site Work (about 20%)
This covers site work, excavation, foundation, utility connections, and basic infrastructure. Early delays here can ripple through the entire timeline, so many developers negotiate a slightly higher first draw.
Draw 2: Framing and Roof (about 25%)
This funds framing, roof, and exterior systems. The structure should be weather-tight before approval. Once framed and covered, interior work can proceed in most weather conditions.
Draw 3: Mechanical and Electrical Rough-In (about 20%)
This covers plumbing, electrical, and HVAC rough-in. All systems should be installed and inspected before drywall. Because specialty trades book up quickly, schedule them early.
Draw 4: Drywall and Interior Finishes (about 20%)
This funds drywall, flooring, trim, and fixtures. Quality control matters here because rework is costly. Many lenders ask for extra photos to verify finish quality.
Draw 5: Final Completion (about 15%)
This funds final items, inspections, and the certificate of occupancy. Lenders may retain 5% to 10% for 30 to 60 days to cover punch list and warranty items.
Strategic Timing for Draw Requests
Timing your requests effectively can significantly affect your cash flow and completion speed. You should always plan draws proactively rather than waiting until each milestone is fully complete.
The Two-Week Advance Strategy
Submit your draw request about two weeks before you need funds. This buffer covers inspection scheduling, weather delays, and processing time. Getting funds early helps you capture contractor discounts and keeps momentum steady.
Peak Season Considerations
Spring and summer increase inspection volume. When possible, submit your requests Tuesday through Thursday. Avoid holiday weeks when teams run short-staffed.
Weather Impact Planning
The weather can slow exterior work. Be ready to pivot to interior tasks to keep progress moving toward the next milestone.
Common Draw Schedule Pitfalls and How to Avoid Them
Incomplete Documentation
Missing invoices, unclear photos, or incomplete reports can add a week or more to processing. Draft a checklist for each request and verify documents before submission.
Milestone Misalignment
Construction work often advances in ways that don't match rigid milestones. During approval, request reasonable flexibility on completion percentages based on industry standards.
Contractor Payment Timing
Your contractor's payment dates may not match your draw releases. Coordinate with your general contractor to align payment schedules with anticipated funding.
Why Work With Private Lenders Like Groundfloor?
Private lenders often offer advantages that help developers avoid these pitfalls.
Customized Milestones
Lenders can tailor milestones to the specific needs of your project.
Faster Processing Times
Private lenders often process draws faster than banks. Our average timeline is about two weeks, depending on the project’s complexity and paperwork accuracy. Faster access to funds supports momentum and reduces carrying costs.
Experience-Based Flexibility
Seasoned developers may qualify for higher draw percentages or lighter inspections. Groundfloor reviews borrower history when structuring construction draw schedules and making milestone adjustments.
Maximizing Your Construction Loan Draw Schedule Success
Treat draw management as a core project task. Build a draw calendar that matches your construction timeline. Communicate with your lender between formal requests. Document all work with clear photos and notes.
Maintain strong relationships with your inspectors and loan officers. When you time requests effectively, submit complete documentation, and maintain open communication, your draw schedule becomes a valuable project management tool rather than a hurdle.
If you need flexible construction financing and support from an experienced team, Groundfloor Lending can help structure a construction draw schedule that matches your timeline.
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September 9, 2025