Using a large sample of bank loans obtained by U.S. firms, we examine the relation between cash holdings and access to external finance via bank loans. We document a negative relation between cash holdings and loan spreads. This negative relation is confirmed in a subsample of quasi-exogenous loan issuances associated with covenant violations and is stronger for higher risk and financially constrained firms. We also find that restrictions to aggregate credit supply have a smaller impact on the cost of funds at high-cash firms, and loans to high-cash firms have fewer restrictive covenants. All else equal, high-cash firms are less financially constrained not only because they have cash to draw down, but also because cash facilitates accessing external capital from banks.