Understanding the Construction Draw Process: A Guide to Smarter Funding with Cetan Funds

If you’re a real estate investor or builder looking to finance a project from the ground up, a hard money construction loan can be a smart move. These private loans offer fast, flexible terms, giving you the capital to acquire, build, or renovate without the delays and red tape of conventional financing. They’re designed for investment or business use and are secured by residential or commercial property.

With any construction loan, including hard money construction loans, funds are disbursed gradually as construction is completed or the project hits specific milestones, like site prep, framing, roofing, or interior work. To get disbursements on the loan approved, borrowers must submit construction draw requests. Knowing how the construction draw process works and how to manage the budgets and draw requests can be the difference between a smooth build and a stalled site.

At Cetan Funds, we specialize in fast, flexible residential construction loans and commercial construction loans across Oregon and Southwest Washington. We know how to meet the needs of builders and developers to help make this process as straightforward and easy as possible. In this post, we’ll explain why learning the construction draw process is important, answer some of the common questions, and explain how our approach helps keep your project moving forward.

Why the Construction Draw Process Matters

The construction draw process is the way you, the builder, get access to your funds, reimburse yourself and cover your expenses throughout the project. By releasing funds as work is completed, the process helps reduce costs and lower risk for both the lender and the borrower while keeping both parties on the same page regarding what’s been completed and what’s next. In addition to controlling costs, this structure keeps everyone accountable and ensures the project moves forward. 

Before starting a construction project, the borrower should plan ahead with a preliminary draw schedule. This helps to manage cash flow, further reduce risk, build trust and mutual understanding with the lender, and prevent potential delays by aligning expectations.

Key Components of a Draw Schedule

Every project is different, but most draw schedules will include the following elements:

• Project Milestones: Funds are disbursed as work is completed so try to anticipate when specific milestones will be reached, such as demolition, site prep, foundation, framing, roofing, interior work, mechanicals, and finishes.
• Draw Requests: To access funds, borrowers submit draw requests with supporting documentation such as a breakdown of expenses, invoices, receipts, and photos.Clarify upfront what documentation the lender requires.
• Approvals: The approval process can differ from one private money lender to another. At Cetan Funds, borrowers work directly with their loan officer, their main point of contact from start to finish on the project, to submit draw requests. Loan officers review draw requests and typically issue funds within 24–48 hours. Cetan Funds allows up to two draws per month and tailors the process to each project’s scope.

Frequently Asked Questions

Below, Cetan Principal and COO Zach Smith and Cetan Associate and Loan Officer Landon Matta answer some of the most common questions we get about the construction draw process. 

Zach Smith personally oversees loan origination, underwriting, and servicing, making him a trusted authority on construction financing in Oregon. With years of hands-on experience as both a lender, real estate investor and entrepreneur, Zach understands exactly what borrowers need to succeed. 

Landon Matta works hard out in the field every day with Cetan clients, reviewing budgets, analyzing opportunities, evaluating draw requests and completing site inspections. He’s quickly becoming an expert in the construction draw process as well.

Q: How does a construction draw work with Cetan Funds, and how is it different from a traditional loan disbursement?
Zach & Landon: “The primary difference with how Cetan handles draws is that all draw requests are reviewed & processed entirely in-house, typically within 24–48 hours. Also, we do not typically charge draw or inspection fees on residential rehab or construction projects. We can also work with contractors to pay for down payments and deposits, or pay invoices for our borrowers when the work is completed.”

Q: Is there a limit to how many draws are allowed per project?
Zach & Landon: “We typically allow up to two draws per month to keep the process efficient, but we’re flexible. If your project requires more frequent draws, we can usually accommodate that. There’s no hard limit on the total number of draws over the life of the project.”

Q: Is an inspection required before each draw is approved?
Zach & Landon:  “Typically, no. In most cases, we can approve draws based on documentation and photos showing the completed work. If an inspection is needed, it will be done by our loan officer or one of our Principals at no cost to the borrower. The only exceptions are when visual documentation isn’t sufficient or if the project is especially large or complex.”

Q: How long does it take for draws to be processed at Cetan Funds?
Zach & Landon: “We process most draw requests within 24 to 48 hours. Once we receive the request and verify that the work has been completed, we move quickly to release the funds. Our goal is to keep your project moving without unnecessary delays.”

Q: When can a borrower request the first draw?
Zach & Landon: “A borrower can request the first draw anytime after closing, as long as it’s for work that has already been completed. “

Q: How much money will a borrower get with each draw?
Zach & Landon: “Each draw is based on the value of completed work. Our team reviews progress on-site or through documentation to confirm completion of the work included in the draw or that specific milestones have been met. Funds are then released according to the approved draw request, ensuring the loan keeps pace with the actual construction progress.”

Q: What happens if work isn’t completed to the lender’s satisfaction?
Zach & Landon: “Funds may not be advanced for work not completed satisfactorily or up to city/county code.”

Q: What happens if a project runs over budget or behind schedule?
Zach & Landon: “Cetan Funds requires an additional 10% contingency on all construction/rehab loans to provide a margin of safety. Further modifications are considered on a case-by-case basis.”

Q: Can a borrower do their own work on a rehab or construction project?
Zach & Landon: “For major specialty work like electrical, plumbing, or HVAC, a licensed contractor is required. In Oregon, anyone handling new construction must be licensed, bonded, and insured by law. So while borrowers can do many aspects themselves, key parts of the job must be done by qualified professionals and certain ground-up builds must be overseen by someone with a valid CCB license.”

Q: Are draws available for soft costs like permits?
Zach & Landon: “Yes, soft costs such as planning, permits and other city fees can be included in the construction budget.”

Q: Can funds be used for any project-related cost?
Zach & Landon: “Funds must be used strictly for property improvements. They can’t be applied to general business expenses like fuel, administrative costs, or equipment purchases.”

How Cetan Funds Simplifies the Process

As a direct lender managing our pooled private equity fund, we make fast decisions without relying on outside investors. Our construction loans are tailored to your timeline and goals, whether flipping a fixer-upper, finishing a stalled project, or building from the ground up. 

Here’s what sets Cetan Funds apart:

• No Draw Fees: Unlike many lenders, we don’t charge additional fees for draw processing or inspections on most residential projects.

• Local Insight: We understand Oregon’s building codes and permitting challenges.

• Flexible Structure: We adjust to your project’s needs, not the other way around.

• Only Pay for What You Use: Interest accrues only on the money you’ve drawn, not your total loan amount.

A clear, well-managed construction draw schedule is one of the most essential tools for staying on budget, keeping your crew paid, and finishing on time. At Cetan Funds, we’re here to make that process easier, faster, and more transparent.

Are you a real estate investor, builder, or contractor in Oregon or Southwest Washington with a project in mind? We may be able to help. Contact us or visit our Loan Programs page to learn how Cetan Funds can support your real estate success.