Processing a draw is the key part of construction loan administration. In order to understand the full process, we have broken it down to look at each step individually.
The five key elements in a draw request are:
- The Invoices
- The Draw Request
- The Inspection
- The Approval
- The Funding
Submitting an Invoice
An invoice can be entered into the system by a lender, borrower or contractor. This is done by first clicking on the "Invoices" tab on the main menu bar. Then click the blue "Add New Invoice" button.
On the next page, select the correct project from the dropdown menu.
Fill out the Submit Invoice form on the next page, starting with the title and description of the invoice. Then enter the amount that is being billed for the correct line items.
After entering the amount that is being billed for the relevant line items, you will need to select the type of lien release you want to submit with the invoice. If using your own lien release, upload it by clicking on the blue "Lien release file" button.
After completing the lien release section, click on the "Submit invoice" button at the bottom of the webpage and you are done!
*Please note that you have the option to attach photos, invoices or notes relevant to the invoice if you would like to do so before final invoice submission.
Submitting a Draw Request
Once the invoices have been submitted for a project, the borrower or contractor can package the draw request.
After logging into your account, click on "Draws" on the navigation bar.
On the next page, click on the blue "Request Draw" button on the right side of the page.
After selecting the correct project from a dropdown menu, you will be taken to the Request New Draw form. Enter a title and description for your draw request. Then select the invoices you would like to include in the draw.
Sign the application for payment and click the blue "Request Draw" button at the bottom of the form. At this point, the lender will receive an email notification saying that a draw request has been submitted.
Requesting an Inspection
Lenders no longer have to request an inspection. Once a draw is submitted, the request for an inspection is sent automatically. The inspector will be notified and will be able to log in and submit their approval for this draw.
Approving the Draw
On the main menu, click on "Draws." This will provide a list of all draws pending approval. Select the draw that you want to approve.
You will next be taken to a page that provides specific details of the draw that you selected. To approve the draw request, scroll to the bottom of the page and click on "Accept." You will be prompted to add a comment and your signature to finalize the approval.
Funding the Draw
Once all necessary parties have approved the draw, the option to fund the draw will appear at the bottom of the draw request. Click on the blue "Fund" button.
At this point, you'll be presented with a list of all the invoices included in the draw that you will be paying, to whom, and for what amount.
From the "Bank Account" drop down menu, you will see a list of your existing bank accounts already set up on the account. Select the bank account that you want to use to fund the draw. (If you do not see any bank accounts, please follow our step by step guide to adding a bank account.)
You also have the option to process payments off-system by removing the checkmark in the "Paid through system" column on the right side of the page.
After agreeing to the disclaimer statement, click the blue "Fund Draw" button at the bottom of the page.
After you press "Fund Draw," notifications will be sent to the accounts that you are funding, prompting them to sign their lien releases and withdraw their funds. Once the "Fund Draw" button is pressed, interest begins accruing on the funds that have been approved.
We are here to help! If you have any questions or comments, please contact us at email@example.com or 1-833-4SIMPLY.