Construction Finance
Construction Drawdown Stages Explained
5 min read- Finance Guide
- Updated 2026
Quick answer
Typical construction progress claims
6 stages
Most builds move through deposit, base, frame, lock up, fixing and completion
- Before payment Invoice and checks required
- During build Interest on drawn balance only
- Funds released As stages are completed
1300 421 044
1300 421 044
Detailed explanation
A construction drawdown is the release of part of the approved loan facility at a specific stage of the build. The exact names can vary slightly between contracts and lenders, but the core structure is usually consistent across Australian residential construction lending.
Standard drawdown structure
Construction loans are commonly released across these stages
- 01Deposit stage
- 02Base or slab stage
- 03Frame stage
- 04Lock up stage
- 05Fixing stage
- 06Completion stage
At each stage:
Builder issues invoice or claim- Lender checks the request matches the approved schedule
- Inspection or confirmation may be required
- Funds are then released to pay the builder
What each stage usually means
A simple guide to the common drawdown points:
-
deposit stage usually covers the upfront amount set out in the building contract
-
base or slab stage usually relates to site preparation, footings and foundations
-
frame stage usually covers the structural skeleton of the building
-
lock up stage usually means walls, roof, doors and windows are sufficiently in place to secure the dwelling
-
fixing stage usually covers internal fit out items such as cabinetry, plaster, internal doors and fixtures
-
completion stage is the final release once the project is finished in line with the contract and lender requirements
Drawdown sequence
-
Early drawdowns
Deposit to frame
-
Mid build drawdowns
Lock up and fixing
-
Final drawdown
Completion
How drawdowns are processed
Lenders review
builder invoice or progress claim- whether the claim matches the approved contract and progress schedule
- inspection or confirmation that the claimed stage is complete
- whether the borrower has contributed any required funds first
- whether the loan remains within approved parameters
- whether documents are correctly signed and submitted
- whether insurance and builder details remain acceptable
Typical drawdown timing
-
Before release
Invoice and checks are usually required
-
Inspection timing
Can affect how quickly the next payment is made
-
Interest impact
Interest is commonly charged only on the amount already drawn
-
Final stage
Completion funds are generally released last, once finish quality and completion evidence are acceptable
Need Help with your Project?
Common problems
Drawdowns can stall when the builder claim, inspection outcome or lender requirements do not line up with the approved stage.
Invoice does not match the stage
If the builder claims the wrong amount or invoices the wrong stage, the lender may not release funds until it is corrected.
Possible solutions include:
check the invoice against the building contract and progress payment schedule- have the builder amend the claim before submission
- make sure any variation is properly documented
- keep the lender updated early if the stage sequence has changed
Stage is not sufficiently complete
If inspection or lender review shows the work is incomplete, the drawdown may be delayed until the stage is finished.
Possible solutions include:
- wait until the builder has genuinely completed the relevant stage
- avoid submitting claims too early to try to speed up cash flow
- confirm access for inspections is available when needed
- keep evidence and communication clear between builder, borrower and lender
Borrower contribution has not been used first
Some lenders require the borrower to contribute their own funds before lender drawdowns begin or before certain later stages are funded.
Possible solutions include:
- understand the lender funding order before construction starts
- keep records showing where the borrower contribution has been paid
- budget for timing gaps between invoices and reimbursements
- raise cash flow issues early rather than after the builder is waiting for payment
Steps to get Finance
Step
01
Obtain loan approval with an accepted progress payment schedule
Step
02
Start construction and complete the first contracted stage
Step
03
Submit the builder invoice or progress claim for that stage
Step
04
Lender checks the request and may order an inspection or confirmation
Step
05
Funds are released for the completed stage if all requirements are met
Step
06
The process repeats until the completion stage is funded and the build is finished
Speak with a Property Finance Specialist
Construction drawdowns can look simple on paper but can become messy when the contract, builder claims and lender rules do not align.
A specialist can review the project, the contract stages and the likely payment flow before cash flow problems appear mid build.
Speak with a finance specialist about your construction drawdown structure
Submit the short form below and a finance specialist can review your progress payment stages, drawdown timing and possible lender issues.
Contact Form
Your enquiry is confidential
Prefer to speak with someone directly ?
Call us to discuss your construction drawdown questions
Additional Questions
You may also find these questions helpful
