A schedule of values that overweights early-phase work items — sitework, mobilization, temporary facilities — is one of the most common and least detected strategies GCs use to pull cash forward on a construction loan. Here is how to spot it before it becomes your problem.
How Front-Loading Works
When a GC submits a schedule of values at the start of a project, they assign dollar amounts to each line item. These amounts should reflect the actual cost of the work. But a GC who needs cash flow — or who simply wants to improve their position — will inflate early-phase items and deflate later-phase items.
The result: the GC bills a disproportionate share of the contract value in the first few months, before the bulk of permanent, value-creating work is installed.
Why It Matters to Lenders
From a lender's perspective, front-loading creates a dangerous mismatch between dollars disbursed and collateral value. If the project stalls at 40% complete but you have already funded 55% of the contract, your loan-to-value position has quietly deteriorated.
How to Detect It
Compare line item values to industry benchmarks. Mobilization on a $5M commercial project should not be $200,000. General conditions should not exceed 8-10% of hard costs.
Watch for vague or bundled line items. "Site preparation and mobilization" as a single $300,000 line item is a red flag. These should be broken out.
Track billing pace vs. schedule. If the project is 20% through its schedule but 35% billed, front-loading is likely present.
An independent draw reviewer catches these patterns because they have seen them before — across dozens of projects and GC relationships.
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