Never Be Waiting: A Guide to Faster Draw Funding

By Cathy Demiro, Post-Close Processor at Backflip, based in Tampa, FL.

When you borrow hard money for the cost of renovations in flipping a house, it’s likely you’ll receive those funds in installments tied to specific project milestones. This is called the “draw”.

Draws suit projects where expenses are incurred over time. Lenders get to monitor project progress, and mitigate risk—ultimately keeping rates down. For borrowers, the benefit is additional capital, fast and when needed, to accomplish their flip. However, we all know the draw process can be frustrating—especially when a lender takes longer than expected to release funds.

At Backflip, we’ve made it our mission to offer a draw experience that’s smoother, faster, and more customer-centric than other lenders. Here, I want to share the draw process, some tips for avoiding delays, and a bit about how we do things differently.

The Draw Process

There are essentially five steps in a draw:

Draw Request: Draws are tied to specific project milestones outlined in your loan agreement. When you hit one, you submit a draw request, providing supporting documentation; invoices, photos, or other evidence of work. In some cases, you will need to request an inspection.

Inspection: An inspector reaches out to confirm a time—Appointments are usually within 48 hours. Remote, video inspections are available for basic and visible items; On-site inspections are required for more complex items like plumbing or electrical work.

Review: The Backflip team now reviews the draw request to ensure that things are going according to plan. (I myself try to look at draw requests within a couple of hours of them coming in.) If additional information is needed prior to approval, we will let you know.

Loan Buyer Review: While Backflip’s internal review is typically completed in 1-2 business days from receipt of the inspection report, if a Backflip partner has purchased the loan, they may also want approval over the request. Occasionally, they’ll request additional documentation, too.

Disbursement: Once the draw request is approved, we wire the funds to your account. Our goal is to get you paid in 2-3 business days of receiving the inspection report.

Top Tips

You accelerate draw approvals by providing all the right information up front, reducing need for follow-up.

Be descriptive in your Scope of Work

Avoid vague descriptions like “interior” or “reno”; instead use specific terms like “Bathroom remodel” or “install new cabinets”. Include detailed sub-descriptions.

Provide Details with your Draw Request

When submitting your draw request, include comments and invoices for each line item. Always submit permit documentation with invoices.

Explain Contingency Line Item

Contingency funds are designed to help cover unexpected overages in scoped work (vs discretionary changes), so that the budget and progress of your flip are not derailed. Explain your need, and include invoices and documents.

Schedule Inspection

For inspections, select ‘appointment required’ if you want to be contacted for scheduling, and check all available times. 

Opt for In-Person Inspection

Even if it seems counterintuitive, an in-person inspection usually results in a faster approval.

Double-Check Bank Details

Confirm your wiring details before we process the first draw request, to avoid a bounced wire.

Why Backflip Wins on Draws 

I love that Backflip members call out our draw process! [Pictured] For us, providing exceptional service isn’t just a goal—it’s our standard. We think a lot about service, flexibility, and access.

Service

We pride ourselves on being attentive and accommodating to our customers, helping you navigate the draw process with ease. We’re available when you need us. Whether you prefer a call, text, or email, we’re ready to assist you when questions arise. You’ll never feel like you’re on your own.

Flexibility

One of the things that sets Backflip apart from other lenders is flexibility. For example, we offer partial reimbursement for materials as long as they are on-site. Many other lenders won’t take on the perceived risk of reimbursing for materials until they’re installed, but we understand the realities of managing a construction project and want to make it as easy as possible for you.

Direct Access to the Draw Team

When you work with Backflip, you’re not just a number. Our draw team works closely with you throughout the process, ensuring any questions are answered and any challenges are handled quickly. So whether you need help understanding a line item or you’re looking for advice on the best way to submit a draw, we’ve got you covered. Ultimately, that translates to a less risky project, and a clearer bottom line.

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In sum, don’t let the draw process stress you out, or make you wait. By following these tips and working closely with us, your draws will be faster than ever. Hope to see you soon!

Disclaimer: This article is for informational purposes only, not financial or investment advice. Always consult a licensed professional.