Drawdowns: keeping the facility ahead of the build

A construction facility does not pay when the builder invoices. It pays after a quantity surveyor inspects, a report issues and the lender processes it.

That cycle takes weeks, and the builder's terms rarely allow for all of them.

Map the cycle before the first claim

Claim date, inspection date, report date, lender approval and funds landing. Each step has a duration, and together they set the real lag.

A developer who has written that down once can predict every month of the build. One who has not discovers it during the first shortfall.

The gap needs funding, deliberately

Between paying the builder and receiving the drawdown sits a sum the developer carries. On a large claim that figure is substantial.

Equity, a working capital facility or agreed terms with the builder can each cover it. Discovering the need during the gap leaves none of those available.

Late paperwork delays money more than anything else

A claim submitted without the supporting documents waits for the next cycle, not the next day. The inspection happens when the paperwork is complete.

A checklist per claim, owned by one person, is worth more than any conversation with the lender.

The builder's own claim quality matters as much as the developer's. A claim that overstates progress gets certified downward, which delays the money and damages the relationship at once.

The quantity surveyor values work, not invoices

A builder can invoice for materials on site; the surveyor may only certify work in place. That difference surprises developers regularly.

Understanding what this surveyor certifies, before the first claim, prevents a monthly argument about the same thing.

Retention reduces every drawdown

Money held as retention is money the facility does not advance, and it accumulates across the build.

Our guide to retentions and the defects period covers tracking it, because that sum comes back and most developers forget to ask.

Interest accrues on drawn funds, not approved ones

A facility approved at a figure costs nothing until it is drawn. Drawing early to feel comfortable starts the interest running for no benefit.

Drawing to need, rather than to limit, is one of the few free savings available on a development.

Line fees usually apply to the whole facility regardless, so the saving is on interest alone. That still matters across a two year build.

Watch the cost to complete, not the amount spent

A lender's real question is whether the remaining facility finishes the building. Spend to date answers nothing on its own.

Cost to complete, updated monthly, is the figure that shows a problem early. Our guide to budget against actual covers keeping it honest.

Presales conditions gate the first drawdown

Most construction facilities release nothing until qualifying presales reach a threshold, and the qualifying test is the lender's rather than the agent's.

Our guide to presales tracking covers the conditions that decide it, which is where most first drawdowns actually stall.

Keep one set of numbers

A developer running one budget, the builder running another and the lender a third produces monthly reconciliation instead of monthly progress.

Agreeing the cost plan format at the start, so all three read the same lines, removes an argument that otherwise repeats every claim.

A variation approved on site and not reflected in the cost plan breaks that agreement quietly. Every approved variation needs to reach all three before the next claim.

What to change first

• The full drawdown cycle gets written down before the first claim
• The funding gap gets a named source, arranged in advance
• One person owns a checklist for each claim's paperwork
• What the surveyor certifies gets agreed before the first inspection
• Retention gets tracked as money the facility will not advance
• Cost to complete updates monthly, beside spend to date