Construction Finance Resource
The 10-item framework lenders actually approve
Every rejected draw has a pattern. This framework documents what complete, reviewable packages look like — built from lender and developer input, regulatory guidance, and industry practice.
Why Draw Packages Get Held
They’re organization problems.
Why Draw Packages Get Held
Most delays aren’t document problems. They’re organization problems.
A technically complete package can still generate multiple rounds of lender follow-up. Navigability failures — missing indices, waivers out of place, amounts that don’t tie — cause as much rework as missing documents.
Rejection reason: missing lien waivers
Missing waivers at the subcontractor level are the single most common reason draw packages are rejected — and the most preventable.
Of commercial loans use AIA G702/G703
Knowing how G702 and G703 interact — and where they commonly fail — is foundational to any draw submission.
Business days for a complete review cycle
The same lender who takes 10 days on a disorganized submission can turn around a clean package in 3. Organization is the variable.
Internal organization rules most packages miss
Document order within sections determines whether a lender can navigate a package efficiently — and whether amounts tie without a search exercise.
The 10-Item Framework
Industry standard construction draw package structure
This 10-item structure reflects consensus across lender and developer input, regulatory guidance, and industry best practice. Loan type variations are additive — this is the universal foundation every package should be built on.
Cover letter / cover sheet
The legal request for funds. States the total draw amount, date, project name, draw number, and authorized signature. Sign the cover letter last — after all amounts are finalized. Never sign before the pay application and sworn statement are complete.
Table of contents
Lists all sections with page ranges. Optional but consistently valued by lenders who review packages regularly. The cleanest packages always include one — it signals organization before the first page is reviewed.
Draw summary — sources & uses
High-level reconciliation showing original budget, cumulative prior draws, current draw request, and balance remaining — with full debt/equity split. Reconcile both project budget and loan budget before submitting. Totals must cross-check against Item 04.
Pay application or sworn statements
Path A (~70–80% of commercial loans): AIA G702 + G703. G702 is the one-page GC pay application summary. G703 is the continuation sheet. G703 totals must tie exactly to G702. Path B: Owner’s sworn + contractor’s sworn — required by statute in Illinois and Michigan. Both must be notarized.
Invoice summary / invoice detail list
A master index of all invoices: vendor name, invoice number, date, amount, and budget line code. Separates hard costs from soft costs. A lender can confirm completeness within 60 seconds if this is done well — without opening a single invoice.
Supporting invoices — hard & soft costs
Backup documentation for all costs above the lender’s invoice threshold — set at loan closing and varying from $1 to $10,000+. Label each invoice with its G703 budget line code. Soft costs should be grouped with a category-level summary. Include interest reserve calculations.
Change order log + executed change orders
Complete list of all change orders — executed and pending — with CO number, description, amount, status, and budget impact. Unapproved budget reallocations are a top reason draws are held. Obtain written lender approval for all reallocations before submitting.
Stored materials log & documentation
Required when requesting funding for materials paid for but not yet installed. Include an inventory list, location, proof of insurance, and photos documenting the secure storage location.
Lien waivers — conditional + unconditional
The rolling two-draw cycle: conditional waivers from the GC and all subs covering the current draw; unconditional waivers confirming prior draw payments were received. Missing waivers — especially at the subcontractor level — are the single most common draw rejection reason.
COI + inspection report + title update
Lenders perform deep review here every draw. COIs (builder’s risk, GL, workers’ comp) with lender named as additional insured. Third-party inspection confirming work-in-place percentages. Title continuation confirming no new liens. Red flags: amounts that don’t tie, missing sub-level waivers, interest reserve trending toward depletion.
