Yes, lenders can sell, transfer, and even use their notes as a substitute for money. Notes can be transferred between lenders. When a lender wants liquidity and does not want to endure the risk of a long term loan, he or she can sell the note to reputed note buying companies at a discount. Notes can also be transferred between family members and friends to offset another loan.
However, the law varies from state to state regarding transferability. It is important to keep proper records of the note and to include clear language in the note to enable selling or transferability of the note. The note should include the terms "payable to order" or "payable to bearer."