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The draw schedule is a detailed payment plan for a construction project. If a bank is financing the project, the draw schedule determines when the bank will disburse funds to you and the contractor. The goal is to make progress payments to the contractor as work is completed.
The draw schedule is the detailed payment plan for your construction project. It should be clear and agreed upon by both parties. It should also provide you adequate assurance that you will have the funds necessary to complete the project.
Managing the flow of funds within a construction loan is much different than for traditional loans. Rather than receiving a lump sum check, construction loans pay out the loan amount over the course of the project. The installments are called draws, as the lender draws funds from the account.
A construction draw schedule is an agreement between the lender, builder, and borrower that outlines when the builder will be paid for their work. In construction projects, payments are made throughout the course of the project rather than in a lump sum before or after.
A draw schedule of five to seven payments is common for a new house. Most draw schedules link payments with milestones in the project, such as completion of the foundation and completion of the rough framing. Sometimes, the draws are more generally based on the percent complete of the total job.
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Related Definitions Approved Drawings means drawings which the Engineer-in-Charge has marked "Approved" and returned to the Contractor. Approval in this context means that the work described thereon may proceed. Sample 1Sample 2Sample 3. Based on 14 documents.
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In many debt capital deals, borrowers receive funds over the course of a year or two, rather than as a lump sum. A draw request is how borrowers access a portion of the loan that they've already negotiated\u2014provided that they're in compliance with the conditions of their credit agreement when they make their request.

simple construction draw schedule