A commercial short sale is a sale of the property for less than the loan balance, with the lender's consent to release its lien for the net proceeds. It resolves the credit through the property sale rather than a foreclosure, but it depends on the borrower cooperating and a buyer for the real estate.
A short sale can work when the borrower is engaged and the property will sell, but it depends on a real-estate buyer and the lender accepting the shortfall. A note sale, by contrast, does not require selling the property or the borrower's cooperation — the lender simply sells the loan.
A short sale sells the property (with lender consent to a shortfall); a note sale sells the loan itself. A note sale does not require a property buyer or borrower cooperation.
When the borrower is engaged, the property is marketable, and the lender prefers a property sale to taking the asset.
A note sale gives the lender a clean exit without the borrower — request a confidential review.