What is a Draw Schedule?

In hard money lending, you don’t typically receive the full loan amount in one lump sum, especially when part of that loan is designated for construction or rehab. That’s where the draw schedule comes in. 

For fix-and-flip investors, new construction developers, and value-add buyers, the draw schedule is a crucial component of how funds are released, work is managed, and timelines are kept on track. 

What Is a Draw Schedule? 

A draw schedule is a timeline or breakdown of how and when a borrower can request portions of their loan funds, specifically for construction or rehab work. It’s typically laid out as a series of milestones, tied to specific phases of the project.

Rather than giving all the rehab or construction funds upfront, the lender holds that portion of the loan in escrow and releases it in installments, or “draws”, as the work is completed. Each draw is usually preceded by an inspection or verification process to confirm that the agreed-upon work has been finished.

Why Draw Schedules Exist in Hard Money Lending 

Hard money lenders aren’t trying to slow you down with extra paperwork. The draw schedule protects both parties: 

• For the lender, it ensures that loan funds are being used as planned and that the project is progressing in line with expectations.
  
  
• For the investor, it provides a structured funding process that supports real-time work and helps avoid misuse of capital.

Lenders want to see their money going into the asset that secures their position. If rehab funds were disbursed all at once and mismanaged, the project could stall, and the property's value might not justify the loan.

What Does a Typical Draw Schedule Look Like?

The draw schedule is often customized based on project size, complexity, and scope of work. That said, most follow a phase-based structure. 

For a fix-and-flip project, the draw schedule might look like this:

• Draw 1: Demo and site prep complete
• Draw 2: Rough plumbing, electrical, and framing
• Draw 3: HVAC installation, drywall, and insulation
• Draw 4: Flooring, cabinetry, tile, and interior finishes
• Draw 5: Exterior work, paint, punch list
  
  

For new construction, it may include: 

• Draw 1: Foundation poured
• Draw 2: Framing complete
• Draw 3: Roof and windows installed
• Draw 4: MEP rough-ins and inspections passed
• Draw 5: Final finishes, landscaping, and CO (certificate of occupancy)

The number of draws and the amount allocated to each depend on the total budget, the expected timeline, and the level of risk the lender is willing to accept at each phase.

How the Draw Process Works

Each lender has its own process, but the general steps are similar across the board:

1. You complete a phase of work. 
2. You submit a draw request, often with photos, receipts, or contractor invoices.
3. The lender reviews and sends an inspector, who verifies that the work is complete.
4. Funds are disbursed, usually by wire or check, within a few business days.
5. Repeat for the next phase.

Most lenders will not reimburse for future work. The draw schedule is based on work already completed, not work that’s about to begin. This means you may need to front some capital or use credit to start each phase before the funds are released.

Tips for Structuring a Smooth Draw Schedule

• Break your scope into logical phases. Avoid lumping too much into one drawer or spacing them too tightly.
  
  
• Get buy-in early. Align your contractor and your lender on the scope and schedule before the project begins.
  
  
• Be realistic about timelines. Allow buffer between phases and prepare for weather, delays, or permit issues.
  
  
• Keep detailed records. Receipts, before-and-after photos, and contractor invoices go a long way in speeding up approvals.
  
  
• Discuss upfront funds with your lender. Some lenders will fund part of the first draw at closing or allow an initial disbursement for materials and labor. 

What Lenders Like Unitas Funding Look For

Unitas Funding collaborates with real estate investors to create draw schedules that are as efficient and investor-friendly as possible, without compromising on risk management. We seek clear project scopes, realistic budgets, and experienced teams that understand the drawing process.

A well-structured draw schedule is a valuable asset in project management. It keeps your rehab moving, your contractor accountable, and your capital flowing.

Plan Draw Schedules As a Financing Reality 

If your deal involves renovation or construction, you will need a draw schedule. It illustrates how funds are allocated and how progress is tracked and verified. 

The better you plan and communicate, the smoother your project will go. Treat the draw schedule as part of your project’s infrastructure. Build it with care, update it as needed, and make sure everyone involved, the lender, GC, and team, is aligned.

At Unitas Funding, we help real estate investors secure hard money loans with practical, well-structured draw schedules tailored to their timelines. Whether you’re rehabbing a duplex or building from the ground up, we’ll help you fund it the right way—on your terms and your schedule.

Tell us about your project. Visit unitasfunding.com to get started.