Glossary · Lending & Draws
Draw Cycle
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Definition
The draw cycle is the full sequence from a builder's draw request to money in the builder's account: request submitted, inspection ordered, site visit, report reviewed against the budget, draw approved, funds released. Its length is counted in days, and every one of them is interest accruing on the outstanding balance while crews wait to be paid.
The six steps.
- Draw request. The builder or borrower submits the request against the budget, usually with invoices and lien waivers.
- Inspection ordered. The lender or its administrator orders a progress inspection of the stage being funded.
- Site visit. The inspector documents the work in place, line by line, with dated and located photos.
- Report review. The administrator compares percent complete with the request and checks that the loan is in balance.
- Approval. The lender decides what to fund; a shortfall trims or holds the draw.
- Funds released. The disbursement closes the cycle and joins the audit trail.
Where the inspection sets the pace.
Steps 2 through 4 are where the days go. A request can sit while an inspector is found, while the visit is scheduled, and while a paper or PDF report makes its way back to the reviewer. The lender decides the approval; the inspection decides how soon the lender has what it needs to decide. How long does it take to get a construction draw funded? puts ranges on each step, and How long does a draw inspection take? separates the visit from the turn time.
Why it matters for lenders.
Cycle time is cost on both sides of the table. The borrower pays interest on the outstanding balance for every day the cycle runs, the builder carries payroll and suppliers until the draw lands, and a slow cycle is one of the first things a builder tells the next lender about. The FDIC's examination procedures for construction and land development lending look for disbursement controls that confirm work before money moves, so a well-run cycle is fast because the evidence arrives quickly, not because a step is skipped. Dead days: the interest hiding in your draw cycle works the math on a typical loan.
How RAZE handles it.
RAZE shortens steps 2 to 4 by taking the order from the lender's system, dispatching an inspector from its network or the lender's own inspector through Direct Request, and returning the report with photos tied to line items and a full status history. The approval stays the lender's.
Sources
Primary sources only. Where a figure appears on this page, it comes from one of these.
See the workflow behind the answer.
RAZE standardizes how draw inspections are ordered, dispatched, captured and delivered, inside the loan administration workflow a lender already runs.
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