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I want to do link exchange with another site, he is offering me footer site-wide link to my site.

This site has about 50 indexed pages on Google, this site has strong SEO data that can help my site.

My question is: is this footer site-wide link can harm my site? Does Google can penalize my site for this? Or because it's a small site it won't harm my site's ranking? Is this risk-free?

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Site-wide footer link CAN and DOES help you rank a site, but is weighted a little bit compared to a singular link on the home page of the same site (interior pages probably won’t be as strong). Perhaps there’s a certain number in Google’s algorithm that says if X number of links are created to a site in a short amount of time, they are devalued. Or, perhaps the home page link has positive value, but all subsequent links have a slight negative value. Either way, the results are the same – footer links can help rank terms.

If you want to find out more about this matter, further reading is here.

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I suggest not putting an external website in the footer. It's totally fine if it's an internal link (e.g., Contact, About, Disclaimer, etc...).

Yes, it was a good SEO tactic before but now it will just dilute all the link juice pointing to that website.

Create a resource page instead and put the website there.

P.S. It's okay to use external social media links as long as it's part of the brand (e.g., FB, Twitter, etc...).

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