A draw inspection is a site visit by a lender's inspector to verify work claimed in a draw request is actually complete and meets quality standards before funds are released. Inspectors review completed work against contractor's invoice and plans, take photos, and report findings. Most construction loans require inspections before each major disbursement to protect the lender and borrower.
Draw inspections are where construction lending theory meets reality. They're the moment when what the contractor claims has been completed is verified by an independent third party.
A draw inspection is an on-site visit by a qualified inspector employed by the lender (or contracted third-party) to verify that work described in a draw request is actually complete and meets quality standards.
The core question an inspector answers: "Has the work claimed in this draw request actually been completed to the standard described in the contract and construction plans?"
Construction lending involves risk. A lender gives a borrower significant capital. The lender's security is the property being built. If the borrower takes the money and doesn't actually build, the lender loses their security.
Draw inspections mitigate this risk by creating objective verification that work is happening and the property is increasing in value with each draw.
| Inspector Type | Background | Pros | Cons |
|---|---|---|---|
| Lender's own | Employed by lending company | Consistent standards | Expensive to employ |
| Third-party | Independent inspection company | Scalable; objective | May not know specifics |
| Construction consultant | Experienced professional | Deep knowledge | Expensive; limited availability |
| GC's QA person | Contractor's own staff | Fast; understands work | Conflict of interest |
Best practice: Use a third-party inspection company. They're independent, scalable, and specialize in lending inspections.
Before the Inspection:
During the Inspection:
What's Verified by Milestone:
| Work | Inspector Focus |
|---|---|
| Foundation | Dimensions, concrete cure, reinforcing placement, grading |
| Framing | Lumber grade/size, connections, spacing, loading paths |
| Electrical | Wire routing, box heights, proper gauge, bonding |
| Plumbing | Pipe sizing, slope, leaks, supports, vents |
| HVAC | Duct sealing, crushing, support, thermostat location |
| Drywall | Attachment, seams, damage, cutouts |
| Final | Systems operational, finishes acceptable, no defects |
A good inspection report includes:
This report becomes the permanent loan file record.
Discrepancy 1: Contractor claims 100% complete; inspector verifies only 90%
Discrepancy 2: Quality issues discovered
Discrepancy 3: Work doesn't match plans
Discrepancy 4: Prior code inspections missing
Mobile Inspection Apps:
Digital Photo Documentation:
Real-Time Reporting:
Integration with Loan System:
Traditional Process: 11 days
Modern Automated Process: 1.5 days
Dispute: "Inspector said work is only 80% complete, but we think it's 95%"
Prevention:
Resolution:
Third-party inspection companies charge:
For a $500,000 project with 5 inspections: $1,500-$2,500 total
ROI Calculation:
Inspections pay for themselves many times over through risk prevention.
Draw inspections make construction lending possible. Without them, lenders have no way to verify work is happening. With inspections, lenders can disburse capital with confidence.
Quick Answer (40-60 words): Scheduling draw disbursements efficiently with software means automating the entire pipeline from milestone tracking through fund release so draws happen on time without manual coordination. Choose integrated software, build reusable templates, set milestone thresholds, automate inspector notifications, enable mobile inspections, configure approval workflows, and monitor with dashboards.
Construction draw scheduling is where planning meets execution. Get it right and projects stay funded and move smoothly. Get it wrong and you're juggling spreadsheets and managing frustrated contractors.
The difference between chaos and control is software designed for construction draw scheduling.
Most construction lenders still manage draw schedules manually:
Problems that result:
Step 1: Select Integrated Software
Choose a platform specifically designed for construction lending that integrates with tools contractors use.
Critical features:
Step 2: Build Your Draw Schedule Templates
Create templates for common project types reusing them repeatedly.
Template includes:
Step 3: Set Up Milestone Thresholds
Be specific about milestone definitions. Vague definitions create disputes.
Bad: "Framing complete" Good: "Framing 100% complete means all load-bearing walls fully framed per plans, all ceiling joists installed, all roof trusses installed and braced, all sheathing installed, all windows and doors set"
Step 4: Automate Inspector Notifications
When draw request submitted:
Step 5: Enable Mobile Inspection Workflows
Inspectors complete work in field:
Step 6: Configure Smart Approval Routing
| Draw Type | Approval Route | Time |
|---|---|---|
| Routine | Auto-approve | Same day |
| Minor variance | Single approver | 1 day |
| Material variance | Credit committee | 2-3 days |
| Budget issue | Hold pending change order | Variable |
| Missing docs | Hold until provided | Variable |
Result: 80% of draws process in one day; complex draws get appropriate review.
Step 7: Monitor with Real-Time Dashboards
Dashboard views:
Contractor reports milestone complete
↓
Contractor submits draw request
↓
System validates documentation
↓
System checks budget
↓
System automatically schedules inspection
↓
Inspector confirmed within 24 hours
↓
Inspector visits next day, completes work
↓
Inspector submits report from site
↓
System routes to appropriate approver
↓
Approver reviews (routine draws: 30 min)
↓
System initiates payment automatically
↓
Payment clears (1-2 days depending on method)
↓
Contractor receives funds
↓
System updates ledger automaticallyTimeline: 3-5 business days submission to funded (Compare to manual: 15-30 days)
Phase 1 (Weeks 1-2): Foundation
Phase 2 (Weeks 3-4): Integration
Phase 3 (Weeks 5-6): Pilot
Phase 4 (Week 7+): Rollout
| Metric | Target |
|---|---|
| Time from submission to funded | 3-5 days |
| Draw submission rate | 95%+ on schedule |
| Inspection cycle | 24 hours |
| Approval cycle | 1 day |
| Draw accuracy | 0% requiring corrections |
| Contractor satisfaction | 4.5+/5 |