How the Draw Process Works

A 'draw' is a scheduled payment request in a construction project. The term comes from drawing down on a construction loan. Whether the project is funded by a construction loan or owner equity, the process for getting paid follows a similar path.

The payment chain

Money flows from the top down: the owner (or their lender) pays the general contractor, and the GC pays the subcontractors. This means your payment depends on the GC getting paid first. Most subcontracts include 'pay-when-paid' or 'pay-if-paid' clauses that tie your payment to when the GC collects from the owner. These are important contract terms to understand before you sign.

A typical draw cycle

Step 1: You submit your pay application (G702/G703) with all required compliance documents — lien waiver, COI, any other docs your contract requires. Step 2: The GC reviews your application, verifies progress, and approves or requests revisions. Step 3: The GC compiles all sub pay apps into their own application to the owner. Step 4: The owner or their lender reviews and approves the draw. Step 5: The owner funds the draw to the GC. Step 6: The GC issues payment to subs, typically within the timeframe specified in your contract.

How long does it take?

What slows payments down

Missing or incorrect compliance documents. Billing percentages that don't match observed progress. Unsigned or incorrect lien waivers. Disputed change orders included in the pay app. GC cash flow problems. Understanding what causes delays helps you submit clean applications that move through quickly.

This is general educational information, not legal advice. Payment deadlines and requirements vary by contract and state law. Consult a construction attorney for guidance specific to your situation.