Progress payments, quantity surveyors and cost-to-complete explained in plain English.
Construction loans aren't paid out in one lump sum. Funds are released in stages as the build progresses, which protects both the borrower and the lender: you only pay interest on what has been drawn, and the lender knows the money is going into the project.
The stages
Every lender structures it slightly differently, but most drawdown schedules follow the physical milestones of the build. Each stage is verified before the next payment is released.
- Slab or base — site preparation and foundations
- Frame — the structural skeleton goes up
- Lock-up — roof, windows and external doors on
- Fixing — internal fit-out, plumbing and electrical
- Completion — final inspection and handover
The role of the quantity surveyor
A quantity surveyor (QS) is the lender's independent set of eyes. Before each drawdown, the QS confirms the work claimed has actually been completed and — just as importantly — that enough funds remain in the facility to finish the job. This is called the cost-to-complete report.
How to keep drawdowns moving
Most drawdown delays are avoidable. Keep your builder's progress claims tidy, respond to QS queries quickly, and flag any variations early. A variation that changes the total cost will almost always need lender approval before the next payment is released.
- Submit progress claims with photos and invoices
- Keep the cost-to-complete up to date
- Get lender sign-off on variations before committing
- Allow a few business days for each inspection and payment
The bottom line
Drawdowns exist to keep everyone honest and the project funded to completion. Understand the schedule before you sign, keep your paperwork current, and the process is usually smooth.
