A draw schedule is a predetermined timeline that outlines when funds from a construction loan will be disbursed throughout the life of a project. The schedule breaks the loan into multiple draws, or payments, that are released as specific stages of construction are completed.
Rather than providing the full loan amount upfront, lenders distribute funds in increments to ensure that money is used appropriately and that construction progress aligns with the project budget and timeline. Each draw typically requires a payment application, supporting documentation, and often a site inspection to verify completed work before funds are released.
Draw schedules are commonly structured around major construction milestones such as site preparation, foundation work, framing, mechanical systems installation, and final completion. By linking funding to verified progress, draw schedules help lenders manage risk, maintain financial oversight, and ensure that projects remain on track throughout the construction process.
