It can make it difficult and in many cases very painful to even retract the foreskin. This condition is called phimosis. More information on Phimosis can be seen online.
Inflammation can make it difficult to reposition the foreskin over the head of the penis. This condition is called paraphimosis.
The swelling can affect the blood supply to the tip of the penis and in very rare cases, certain individuals might even report inability to achieve erection during intercourse (though this is very rare).
Scaring, Phimosis and Para Phimosis are major problems which has to be given proper attention and treated as soon as possible.
Balanitis caused by accidents or injuries of some sort can have a variety of complications on its own.
Only way to prevent the inflammation from getting complicated is to consult a doctor as early as possible, right after the symptoms occur and go through the treatment in earnest. By hesitating to talk about the problem with friends and family and postponing meeting with the doctor can only lead the problem to get more and more complicated.