How can one legitimately refuse a person's request to borrow money or things, without lying, to avoid procrastination or their return in damaged condition, and the potential verbal altercations and anger that might result from that?

It is permissible to use tawriyah (double entendre) and ma'areedh (allusions) to avoid lying when requesting a loan or a borrowed item. For instance, a person might say, "I do not have it now," intending that it is not in its designated place, or "If Allah facilitates it." It should be noted that a loan is a great act of worship (qurbah), and overlooking the one in hardship and granting respite to the one who is well-off are reasons for Allah's forgiveness. As for borrowing, there are hadiths that explain the greatness of its reward, and one example of it is giving an animal to benefit from its milk and wool, and then returning it.