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Lalsar Infra · Question
Short answer
Build a month-by-month cash plan that sets contractor payment stages against the lender's release conditions, then keep your own contribution ready to go in first. The usual gap is timing: the contractor expects payment on completion of a stage, while the lender releases only after inspection or certification. Plan for that gap, document progress well, and keep a small reserve.
Construction loans are released in tranches, not all at once. Each release depends on conditions: completed work verified by the lender's engineer, proof that your own contribution has been spent, and updated papers. Contractors, on the other hand, bill by stage or by measured work.
Agree the payment schedule in the contract so that each stage has a clear, measurable completion point. Share it with the lender early and ask how it will verify each stage. Keep measurement sheets and photographs up to date, because documentation delays hold up releases.
Put your own contribution into the project early and record it in a way the lender accepts. Keep a modest reserve for short delays, and ask whether any short-term bridging arrangement is available.
A warehouse build in three stages
The owner agrees with the contractor that a stage payment falls due only after the measured work is signed off. He submits the sign-off and photographs to the lender on the same day, so the next release arrives close to when the contractor's bill is due, not weeks later.
Reconcile monthly
Compare amounts paid, work certified and funds released every month. A widening difference is an early warning.
Release terms differ by lender, so follow the sanction conditions of your own loan.
Last reviewed
This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority.