I agree that sometimes borrowing money from a friend can damage the friendship. This might happen either due to the friend who borrows the money, or the one who lends it.
In the former case, there are various instances in which the borrower can put the friendship on stake. For example, in spite of having the money with himself, he might go and ask for it from a friend just to live life on credit. This creates a bad impression on his friend. Although being a friend he might lend the money to him once or twice, the friendship certainly gets affected as a result of this personal nature.