Construction money, explained
Draw schedule
A draw schedule is the agreed plan for releasing payments across a construction project — it lists each draw (payment), what triggers it, and how much it's worth, so the owner, lender, and contractor all know when money changes hands.
Updated June 2026
What is a draw schedule?
A draw schedule is the payment roadmap for a job. A draw is a single release of funds, and the schedule defines the full sequence: how many draws there will be, what each is worth, and the milestone or percentage of completion that unlocks it. It is agreed before work starts and referenced every time a payment is requested.
On owner-financed remodels it might be a handful of draws tied to phases. On a bank-financed new build, the lender usually dictates the schedule and sends an inspector to verify the work before each draw is funded. Either way, the schedule is what keeps everyone honest about pace versus payment.
How do you build a draw schedule?
Start from the scope and total contract price, then break the job into logical stages a customer or lender can verify — for example deposit, foundation, framing, dry-in, rough-ins, drywall, finishes, and final. Assign a dollar amount or percentage to each so the draws sum to the contract total.
Tie each draw to an objective, inspectable trigger rather than a calendar date alone. Front-loading draws is tempting but risky: lenders push back on it, and over-billing early leaves you exposed if the job stalls. A balanced schedule that roughly matches money received to costs incurred protects both sides and keeps you from financing the job yourself.
Account for the deposit and retainage in the schedule. A deposit reduces what's collected on later draws, and a retainage percentage held from each draw means the final draw carries the accumulated retention release.
Draw schedule vs. schedule of values
They are related but not the same. A schedule of values breaks the contract sum into line items of work and is used to measure how complete each item is. A draw schedule is about timing and triggers — when money is released. On many jobs the draw schedule is derived from the schedule of values, but a draw schedule can also be a simple milestone-based list.
Simple Contractor CRM connects this end to end: a line-item estimate becomes the contract, you bill progress draws against it, apply deposits and retainage, and record payments as they come in. Online card payments are planned at launch; today the app records payments and tracks the receivable so you always know what each draw still owes.
Worked example
On a $200,000 build, a simple five-draw schedule might run: 10% deposit at signing ($20,000), 20% at foundation ($40,000), 25% at framing complete ($50,000), 25% at rough-ins passed ($50,000), and 20% at final completion ($40,000).
Add 10% retainage held from each non-deposit draw and the numbers shift: you collect $36,000 instead of $40,000 at foundation, and so on, with the $18,000 of accumulated retainage (10% of the $180,000 in non-deposit draws) released with or after the final draw once the work is accepted.
Frequently asked
- Who sets the draw schedule?
- On financed jobs the lender usually controls it and inspects before funding each draw. On owner-paid jobs the contractor and owner negotiate it as part of the contract.
- How many draws should a job have?
- There's no fixed number — small remodels may use three to five draws while a custom home can have ten or more, each tied to a verifiable stage of completion.
- Can I front-load a draw schedule?
- It's risky and lenders resist it. Heavily front-loaded draws leave the paying party exposed if the job stalls, so keep draws roughly aligned with the work and costs in each stage.
- What's the difference between a draw and an invoice?
- A draw is the release of funds at a milestone; the invoice (or pay application) is the document you submit to request that draw.
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