Construction Draw Management

Draw Schedule Establishment

Creation of Draw Schedule: At the project’s outset, the lender, owner, and project manager agree on a detailed draw schedule. This schedule outlines specific milestones and phases for which funds will be released.

Smart Contract Setup: The lender utilizes the platform to create a smart contract corresponding to the draw schedule. Each milestone is encoded into the smart contract with predefined conditions for fund release.

Completion of Milestone

Work Completion Report: The general contractor completes a phase of the project and prepares a detailed report, substantiated by necessary documents, to demonstrate the work done.

Digital Identity Verification: All parties (contractors, subcontractors, suppliers) involved in the completed phase create a verified digital identity linked to a digital wallet to securely complete required documentation and receive funds.

Submission of Draw Request

Document Bundle Submission: The general contractor submits a draw request to the lender. This bundle includes:

• Invoices and Receipts: Detailed invoices and receipts from subcontractors and suppliers.
• Schedule of Values: An updated schedule of values, showing line-item tasks and associated budgets.
• Change Orders: Any approved change orders detailing modifications to the original plan.
• Project Progress Overview: A summary of the project’s progress, outlining the completed milestone.
•  

Automated Verification Process

Smart Contract Verification: The smart contract automatically checks the submitted documents against predefined conditions for the milestone.

Inspections and Appraisals: If required, the VUMP platform triggers an inspection process. Inspection reports are uploaded directly into the platform and verified through the smart contract.

Lien Waivers: Conditional lien waivers are automatically requested from all parties involved, confirming they waive the right to file a lien upon payment. Each party must complete a biometric verification before executing the lien waiver, which is then automatically added to the draw.

Approval and Fund Disbursement

Automated Approval: Once the conditions are met and verified by the smart contract, the draw request is automatically approved.

Fund Release via Digital Wallets: Funds are disbursed automatically from the digital transaction wallet to the digital wallets of the relevant parties (contractors, subcontractors, suppliers) as specified in the draw request. 

Post-Disbursement Tracking

Immutable Ledger Update: Every transaction, from draw request submission to fund disbursement, is recorded as an entry on the immutable ledger, maintaining an audit trail of all activities.

Version Control: Any updates or changes to the draw request or documents are recorded as new entries, preserving all previous versions for transparency.

Final Payment and Project Completion

Final Payment Conditions: Additional conditions may be built into the smart contract for final payment, such as final inspections and certificates. The lender can define the requirements.

Release of Final Payment: Once all requirements are met, final payments will automatically be transferred to each party’s secure digital wallet. Final lien waivers and other documentation can be automatically collected upon payment, immutably stored in the transaction record.