A construction draw request is a formal application a developer or general contractor submits to a construction lender to release loan funds for work completed and materials stored during a billing period. It documents progress against the budget, is verified against the site, and funds in stages rather than as a lump sum.
How Does a Construction Draw Request Work?
A construction draw request works by billing the lender only for the portion of the project completed since the last draw, then funding after verification. The general contractor prepares a payment application against the schedule of values, an owner's representative or architect certifies it against actual site progress, and the lender releases funds net of retainage. Draws repeat monthly through completion.
The industry-standard documents are the AIA G702, the Application and Certificate for Payment cover sheet, and the AIA G703, the continuation sheet that breaks the contract down line by line. Per DrawStack, the G702 summarizes the original contract amount, approved change orders, total completed and stored to date, retainage withheld, and the net current payment due, while the G703 shows the scheduled value and percent complete for each line item.
Document | Role in the draw |
Schedule of values | Contract total allocated across every line item; the baseline for billing |
AIA G702 | Cover sheet summarizing contract, completed work, retainage, and net due |
AIA G703 | Continuation sheet detailing each line's value, work completed, and materials stored |
Lien waivers | Signed releases from subcontractors confirming payment for prior work |
Inspection report | Third-party confirmation that claimed percent-complete matches the site |
Before funding, most lenders require supporting documentation: lien waivers from the general contractor and subcontractors, updated project budget status, and a current inspection report confirming the claimed progress.
Why the Construction Draw Request Matters
The construction draw request matters because it is the control point that keeps loan dollars tied to real, verified progress. Lenders disburse against completed work rather than promises, which protects the loan collateral and limits exposure if a project stalls. A clean, well-documented draw funds fast; a sloppy one gets sent back.
The most cited failure is math that does not foot. Per DrawStack, the most common error that gets a draw rejected is when the G703 line totals do not match the G702 summary, which immediately flags the package for manual review and usually forces a resubmission. Percent-complete claims that exceed what the inspector observes are the other classic red flag, so a draw that claims 60 percent framing against a 40 percent inspection stalls.
Example
A general contractor on a $10,000,000 contract has completed $3,000,000 of work to date, of which $2,000,000 was billed in prior draws. The current draw covers the $1,000,000 completed this period. The lender withholds 10 percent retainage, so the net funded this draw is $900,000, with $100,000 held back until substantial completion.
Line | Amount |
Total contract value | $10,000,000 |
Completed and stored to date | $3,000,000 |
Less previously billed | $2,000,000 |
Work completed this period | $1,000,000 |
Less retainage at 10% | $100,000 |
Net amount funded this draw | $900,000 |
Retainage accumulates on every draw. After this draw the lender holds $300,000 total, which is 10 percent of the $3,000,000 completed to date. Per industry sources including Built, retainage typically runs 5 to 10 percent of each progress payment and is released at substantial completion, so that accumulated $300,000 stays withheld as a completion incentive until the project reaches its milestone.
Variations and Edge Cases
Construction draw requests vary by lender, project type, and contract terms, so the same completed work can fund differently depending on retainage rules and stored-material policy. The table below covers the variants a developer should confirm with the lender before the first draw.
Variant | Treatment |
Retainage percentage | Commonly 5 to 10 percent per draw; federal contracts capped at 10 percent under FAR 52.232-5 |
Stored materials | Fundable only with invoices and proof of purchase showing the materials exist |
Change orders | Must appear in the schedule of values before work can be drawn against them |
Retainage release | Often reduced or released at substantial completion, sometimes only after final certificate of occupancy |
Lender inspection | Larger commercial projects use an independent inspector to verify each draw |
The recurring mistake is claiming work before lien waivers are collected. Most lenders will not approve a line item without a waiver from the subcontractor who did the work, so submitting first and gathering waivers later guarantees a delay.
Construction Draw Request vs Schedule of Values
A construction draw request is often confused with the schedule of values, and they play different roles in the same process. The schedule of values is the fixed baseline: the total contract price divided across every line item at the start of the job. The construction draw request is the periodic bill that reports how much of each of those line items was completed this period.
The relationship is that every draw is measured against the schedule of values. The schedule of values is written once and amended only for approved change orders, while a draw request is submitted repeatedly, typically monthly, each one showing incremental progress against that fixed baseline. One is the ruler; the other is each measurement taken with it.
Frequently Asked Questions
What documents are required for a construction draw request?A construction draw request typically requires the AIA G702 and G703 payment application, an updated schedule of values, lien waivers from the general contractor and subcontractors, invoices for any stored materials, and a current inspection report confirming that claimed progress matches the site.
How much retainage is withheld on a construction draw?Retainage typically runs 5 to 10 percent of each progress payment and accumulates until substantial completion. Federal projects are capped at 10 percent under FAR 52.232-5, while state caps vary. The withheld amount is released once the project reaches its completion milestone.
Why do construction draw requests get rejected?The most common reason is math that does not foot, where the G703 line totals do not match the G702 summary. Other frequent causes are missing lien waivers, undocumented stored materials, and percent-complete claims that exceed what the lender's inspector observed on site.
Related Terms
Construction Loan
Schedule of Values
Retainage
Loan-to-Cost Ratio
Mechanics Lien