Funding follows progress
Construction loans don't fund in a lump sum. Money is released in draws tied to completed, inspected work, protecting the lender (and you) from paying for work that hasn't happened.
A typical draw cycle
Most lenders run a monthly cycle, though larger projects may draw more frequently.
- You submit a draw request against your approved budget line items
- A third-party inspector verifies percent complete on site
- The lender reconciles the request against the budget and prior draws
- Funds are wired, typically 3–10 business days after a clean request
Retainage and contingency
Many lenders hold back 5–10% retainage per line item until final completion, and separately track an unused contingency line that can be reallocated but not spent freely.
What slows draws down
Incomplete lien waivers, budget line items that don't match invoices, and change orders that haven't been approved are the most common causes of delay. Keeping clean, current paperwork keeps draws moving.
Tips for smoother draws
Build a simple tracking sheet that mirrors the lender's draw schedule and update it weekly, not the day before you submit.
- Get subcontractor lien waivers as work is paid, not months later
- Submit change orders for lender approval before the work starts
- Keep photos of progress for each draw