When planning a new construction project, getting the needed financing is one of the most important steps. Most lenders aren’t going to want to simply ‘write a check’ for the full amount of the entire project before it has even begun, however. This is where a document known as a draw schedule comes in.

A draw schedule is an agreed upon schedule of when money will be released to the construction company (or contractor), to complete the work. As the job progresses, the needed finances are provided to keep everything progressing forward. Lenders may have someone inspecting the project along the way as well, to ensure there aren’t any problems. Some things to consider when drafting up a draw schedule with the lender include the following:

Schedule of Values

One key document to use while creating a draw schedule is commonly called the schedule of values. This will list off all the major steps that need to be completed for the project, their approximate cost, and the approximate percent of the total cost of the project that makes up. These items will then typically be combined into ‘groups,’ which will be when each draw is made.

Number of Draws

A draw schedule can have any number of draws that is appropriate for a project, and is agreed upon by the relevant parties. A typical new home construction project, for example, will usually have 5 to 7 draws. Larger projects may have more, and each one will be for a higher dollar amount. When determining the number of draws, it is important to balance the convenience of having the cash that is needed on hand, with the risk being taken on by the lender.


If the lender is going to require inspections of the work that has been completed prior to releasing funds for a draw, that should be agreed upon while making the draw schedule. When working on large construction jobs, unexpected delays can cause serious complications. Being aware of the need for inspections, and knowing who to contact to schedule them, can help ensure progress can continue on schedule.

What to Do with Changes in the Job

Another challenge that should be addressed is what to do should there be significant changes in the cost of a job. For example, if a contractor is hired to build a new home, they will make up all the plans and cost estimates with the owners, and present it to the lender when making the draw schedule. In many cases, the people who are having the home built, may change their minds on certain aspects of the project. If, for example, they decide to move from a traditional bathtub, to a high-end whirlpool style tub, it can add many thousands of dollars on to the project. The added costs either need to be paid for by the people who want the project, the contractors, or the financers. Knowing where the money will come from up front is something that should be settled along with the draw schedule.

Contact Us

If you need assistance negotiating a draw schedule with a lender, or you would like to have a draw schedule written up to present to a lender, please contact Florida Construction Law Group. We can go over your options, and help ensure you have an effective draw schedule that will meet all your needs.