A link exchanged between two websites. Context and intent determine whether the exchange is legitimate or manipulative.
A reciprocal link occurs when two websites link to each other. That pattern can arise naturally between related organizations or resources. The mere existence of links in both directions does not tell you why they were added, whether the pages are useful or whether the arrangement is manipulative.
Google’s spam policies identify excessive link exchanges aimed at manipulating rankings as a problem. That is different from two genuine partners providing relevant navigation for their audiences. The reason for the links, their context and the scale of the arrangement matter more than a simple rule that every mutual link is good or bad.
For a small business, the sensible question is whether each link independently helps a reader. A partnership should not require irrelevant pages or forced keyword wording merely to satisfy a search campaign. If the arrangement is paid or sponsored, its commercial nature should also be represented appropriately rather than concealed behind the language of partnership.
Takeaway: Judge mutual links by their purpose and usefulness. Do not turn ordinary relationships into a large exchange scheme or assume that a legitimate partnership requires links on unrelated pages.
Example
A wedding photographer links to a venue’s visitor information when describing a shoot, and the venue lists the photographer among relevant suppliers. Those references can serve different practical needs. A blanket agreement to exchange keyword links with hundreds of unrelated businesses would be a different arrangement.
What to check
Review the actual pages and the proposed wording before agreeing. Ask whether each reference would still make sense without an SEO incentive. Avoid mandatory exchanges whose primary deliverable is ranking manipulation rather than useful information or a transparent commercial placement.
For more detail, see Google link spam policies.