In one sentence
A periodic advance of construction loan proceeds against completed work, verified by inspection and conditioned on lien waivers and budget compliance.
The longer version
Each draw package typically includes the requisition, updated budget, inspector's report, invoices, and conditional and unconditional lien waivers. Title date-downs confirm no intervening liens before funds move.
Draws are a monthly mini-closing for the life of construction, which is why construction lending teams live and die by checklist discipline and document turnaround.
In Prodeal
Each draw runs as a repeatable checklist from a template, with the inspector, title, and borrower uploading against their own lines and the approval trail kept per draw.
Common questions
- How does a construction draw work?
- The borrower submits a draw request for completed work, a construction consultant inspects and confirms it, the title company dates down for liens, and the lender funds against approved costs, usually less retainage.
- What documents come with a construction draw request?
- The contractor's application for payment, invoices, lien waivers from parties paid in the last draw, the inspector's report, and an updated budget and schedule.
- What is retainage in a construction draw?
- A percentage held back from each payment to the contractor until completion, as security that the work will be finished and punch list items closed.
Keep reading
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The post-closing audit trailWhat examiners ask for and how to have it ready.
- Setting up a data room for a loan closingThe folder skeleton and the first hour.
- Construction loan managementDraws, lien waivers and the inspection record in one place.