Private Lending Construction Loan

[George Ramsay]

Hey everyone

I have a noobie question I was hoping the group could help out with. I'm doing my first construction loan for a rehab project and gave the first draw to the borrower. Draw was based on invoices and receipts. Borrower asked if I would do the draw more in line with hard money lender policy and allow draws based on his scope of work estimates. So for instance, if he gets the kitchen and bathrooms done for $18,500 but his scope of work estimate is $20,000 he would get a draw for $20,000. Right now im giving him draws based on paid out invoices. 

Appreciate any feedback