What Is a Draw Schedule? Tie Every Draw to Something You Can Photograph
The agreed plan of when you get paid during a job and what has to be complete before each payment. Get it wrong and you finance the customer's building out of your own working capital for the length of the project.
Also called Payment schedule, Draw request schedule.
Build your draw schedule Enter the contract value and the draws. It works out each payment, the running total and what is left to come. Free, no signup.What it does
A draw schedule breaks the contract price into payments and attaches each one to a point in the work. Deposit at signing, a draw when the rough in passes, a draw at drywall, and so on to the final payment at completion.
It exists because nobody can fund a whole project out of their own pocket, and because the customer will not hand over the full price in advance. It is the mechanism that keeps both sides roughly level as the work proceeds.
On a job with a construction loan it is also the lender's document. The lender releases against it, an inspector verifies against it, and a schedule the lender has not approved is a schedule that will not produce money on time.
Front loading, and why the inspector is looking for it
Front loading means putting more of the price into the early draws than the early work justifies. Contractors do it to improve cash position, and it is common enough that lenders' inspectors treat the first two draws with particular attention.
There is a legitimate version. Mobilisation, permits, design work and a large material order genuinely do land at the start, and a schedule that pretends otherwise is unrealistic in the other direction.
The illegitimate version, where the early draws are inflated and the last draws cannot cover the work left, is dangerous for the contractor as well as for the owner. It leaves the least money attached to the part of the job most likely to overrun, which is the finish work and the punch list.
A milestone that cannot be verified is not a milestone
The best test for a draw schedule line is whether a person standing in the building could confirm it in thirty seconds. Framing complete, roof dried in, rough inspections passed, drywall hung: all verifiable.
Fifty percent complete is not. Nobody can check it, so it becomes a negotiation every time, and the negotiation happens when you have already spent the money.
Third party events are the strongest of all, because neither party controls them. An inspection signed off by the municipal inspector is a fact. That is why tying draws to inspections rather than to percentages removes most of the friction from getting paid.
Retainage comes out of every one of these
If the contract holds retainage, it is deducted from each draw as it is released, not settled at the end. A ten percent retainage on a schedule you thought was covering your costs means each draw arrives ten percent lighter.
Plan the schedule with that in mind, especially in the middle of the job where the spend is heaviest and the accumulated retainage is largest. This is the point at which underfunded schedules fail.
Also agree in writing what releases it. Substantial completion, the signed punch list, or final inspection are all workable answers. No answer at all is the one that leaves the money sitting for months.
A workable residential draw schedule
An illustration, not a rule: every job and every lender differs. The point is the shape, which is verifiable milestones and a final payment large enough that finishing the job is still worth doing.
| Draw | Released when | Share of contract |
|---|---|---|
| Deposit | Contract signed, permits applied for, materials ordered | 10% |
| Draw 1 | Site work and foundation complete, inspection passed | 20% |
| Draw 2 | Framing complete, roof dried in | 20% |
| Draw 3 | Rough in complete, mechanical and electrical inspections passed | 20% |
| Draw 4 | Drywall hung and finished, interior trim started | 15% |
| Final | Final inspection passed and punch list signed off | 15% |
Every milestone above is checkable by looking at the building or at an inspection record. If a line on your schedule is not, rewrite it before the job starts rather than arguing about it while the money is out.
What to do with it
Questions people ask
What is a typical draw schedule for a residential job?
Commonly a deposit around ten percent, three or four progress draws tied to inspections or clear physical milestones, and a final payment of ten to fifteen percent at completion. The exact split matters less than two things: that each milestone is verifiable, and that the final payment is large enough that finishing properly is still worth your while.
Can a contractor ask for a large deposit up front?
Several states cap deposits on residential work by statute or by licensing rule, so check the local limit rather than assuming. A deposit that genuinely reflects mobilisation, permits and material orders is normal. One that funds most of the job before work starts is the pattern consumer protection rules were written to stop.
What is the difference between a draw schedule and a schedule of values?
A draw schedule says when money is released and against what event. A schedule of values breaks the contract sum down line by line so that partial completion can be measured. They often sit side by side on the same job, with the schedule of values used to justify the draw the schedule allows.
What happens if the owner will not release a draw?
Go to the schedule first and establish whether the milestone was met, which is easy when the milestones are verifiable and impossible when they are percentages. Then the contract: most set a period for payment and many states have a prompt payment statute that runs interest automatically. Stopping work has its own contractual consequences and is not a step to take on instinct.