What is Draw Request?
A draw request is a formal application for funds from a construction loan or escrow account — typically for progress payments. Learn how draw requests work, when they're used, and how to submit one correctly.
What Is a Draw Request?
A draw request (also called a draw or construction draw) is a formal application submitted to a lender, client, or escrow agent requesting the release of funds for work completed on a project. It's the mechanism by which money held in a construction loan or escrow account is released to contractors and suppliers as a project progresses. Think of a construction loan like a bucket of money held by the bank. Each time the contractor reaches a milestone, they submit a draw request — documentation proving work is done — and the bank releases the next "draw" from the bucket. Draw requests are most commonly associated with: - Construction loans — residential and commercial - Renovation financing — home improvements funded by HELOCs or construction loans - Escrow-funded projects — where funds are held and released upon completion of milestones - Government construction contracts — with progress payment requirements
How Draw Requests Work
The Flow 1. Loan/escrow established — Funds are set aside for the project 2. Draw schedule defined — Milestones or percentages that trigger draws are agreed upon upfront 3. Work progresses — Contractor completes work toward the next milestone 4. Draw request submitted — Contractor documents work completed and requests funds 5. Inspection/verification — Lender or inspector verifies work (often required) 6. Funds released — Money is released to the contractor 7. Repeat — Until project is complete Typical Draw Schedule (Residential Construction) | Draw | Trigger | % of Loan | |---|---|---| | Draw 1 | Land purchased, permits obtained | 10% | | Draw 2 | Foundation complete | 15% | | Draw 3 | Framing and roof complete | 20% | | Draw 4 | Mechanical rough-in (plumbing, electrical, HVAC) | 20% | | Draw 5 | Insulation and drywall complete | 15% | | Draw 6 | Final inspection, certificate of occupancy | 20% |
What a Draw Request Package Includes
1. Draw Request Form The official form requesting the draw amount, signed by the contractor. 2. Schedule of Values A breakdown showing how the total project cost is divided into line items, and how each line item has been completed. | Line Item | Total Value | % Complete | Amount Requested | |---|---|---|---| | Foundation | $40,000 | 100% | $40,000 | | Framing | $60,000 | 100% | $60,000 | | Roofing | $25,000 | 100% | $25,000 | | Plumbing rough-in | $20,000 | 80% | $16,000 | | Electrical rough-in | $25,000 | 75% | $18,750 | | Total | $170,000 | | $159,750 | 3. Supporting Documentation - Photos — Progress photos showing completed work - Inspector sign-off — Municipal inspections sign-offs for each stage - Architect certification — Sometimes required to certify progress - Subcontractor invoices — Proof of subcontractor payments - Material receipts — Proof of materials purchased - Lien waivers — Sworn statements from subcontractors that they've been paid
Draw Request vs. Progress Invoice
| | Draw Request | Progress Invoice | |---|---|---| | Used for | Construction loans, escrow accounts | General contractor → client | | Recipient | Lender, bank, escrow agent | Project owner/client | | Documentation | Highly detailed, includes inspections | Invoice + progress summary | | Verification | Often requires third-party inspection | Often client-reviewed only | | Funding source | Loan/escrow funds | Client's operating cash |
Example: Draw Request for a Home Renovation
Project: $200,000 kitchen renovation funded by a home equity loan Draw schedule: 5 draws based on completion stages Draw 3 request (after mechanical rough-in): - Total project budget: $200,000 - Previous draws: $80,000 (Draws 1 & 2) - Current draw request: $60,000 - Remaining after this draw: $60,000 (Draws 4 & 5) Documentation attached: - Municipal inspection sign-offs for plumbing, electrical, HVAC - Photos of rough-in work - Subcontractor invoices from plumber ($8,500), electrician ($12,000), HVAC ($9,000) - Signed lien waivers from all subcontractors Lender approves and releases $60,000 to borrower → paid to contractor
Common Draw Request Mistakes
1. Requesting too much — If work isn't actually complete, the draw will be reduced or denied 2. Missing documentation — Incomplete draw packages delay funding 3. Not accounting for retainage — Lenders often hold 10% retainage until final draw 4. No inspection sign-offs — Most construction draws require city inspections 5. Asking too late in the month — Processing can take 5-10 business days
The Bottom Line
Draw requests are how construction and large projects get funded incrementally — proving work is done, requesting the next portion of funds. If you're a contractor or freelancer working on construction or escrow-funded projects, understanding the draw process is essential. Submit complete documentation, get inspections signed off promptly, and don't request draws before work is genuinely complete. (Bill construction projects →) (Understand progress billing →) (Manage retainage →) Key Takeaways: 1. A draw request formally requests release of funds from a construction loan or escrow 2. Documentation must prove work is complete — photos, inspections, invoices 3. Most construction loans release funds in predetermined draws tied to milestones 4. Include lien waivers to prove subcontractors have been paid 5. Submit complete draw packages to avoid delays in funding Bill construction projects professionally — Try Eonebill Free Eonebill helps you track project milestones, manage construction billing, and create the documentation needed for draw requests. View Pricing → | Glossary Home → | Home →