So I am forming a band and my friend wants to play bass in the band. The only problem is that he doesn't have a bass guitar. Since I will be playing a 7 string guitar (and I am the only guitarist in the band) I think it would be fair if he got a 5 string bass. What would be a beginners 5 string bass for my friend?

I'd say "the one he can afford". I'm not being facetious. Go to a music store, try out a few, rank the ones he likes and see if he can find one used. Someone else might have some specific models in mind, but I've found this to be the basic principle behind buying just about any instrument.

Squier makes some solid 5-string jazz basses that retail for $199, you may even be able to find one of those used pretty easily. Ibanez, ESP, and Dean all make decent five strings in the ~$200 range. It's also practical to find a decent used four string, clean it up a bit, put heavy strings on it, and tune it down, because it's a bit easier to learn on a four string and you'll have a better selection of four string basses.

Also, listen to Grave_Wyrm.

This is solid advice, A bass tuned B-D has all the notes the common bass player needs. If you're not wanting any solos or chords from your bassist, the G string is completely optional.
Plus if your bassist has small hands like me, or has little experience playing a stringed instrument, the thinner neck will make starting the instrument a lot easier.

I'd recommend you try out low-end Schecter basses, the quality of them seems pretty good, they tend to have nice thin necks and they usually have some EQ controls (which I find to be one of the best features a metal bass can have). I don't think a lot of pawn shops know that Schecter is an established brand, so you might be able to get a mid-range bass on the cheap if you're lucky, that's how I discovered the brand.

Yamaha and Ibanez have some of the best sounding budget basses that I've heard. They can run from $200-350 and you can probably find one for less if you comb the pawn shops and ebay. Try em out first at your local music store just to make sure he gets familiar with using a 5-string. If it proves too challenging, do what the other poster says and just tune down a 4-string.

take him to a music store like music-go-round or music center with $200 and have him try a few out, I paid $250 less for my washburn a few months ago by looking through used guitars.

I will second Schecter as one of the best options. Balance is great and they feel above their price range. I have some pretty high end basses, and I can say that from playing the low-end Schecters, they do a good job of making a quality instrument for a good price. Also, while I have not tried their basses, Laguna makes a great sounding and great feeling budget guitar. Musician's Friend is selling a laguna 4 string for $200.
In my opinion, having played on this before, this is best budget bass I know.

http://www.musiciansfriend.com/bass/sch ... ass-guitar

Also, if you are a beginner, I will echo the sentiment of getting a 4 string and dropping it to B. Very rarely will you find yourself in a situation as a beginner that you will need all five strings, so just go with this.

This guy couldn't be any more right.

you probably want a bass with good string tension. cheaper ibanez basses always sound kind of floppy and shitty. maybe try a 4 string squier bass with really heavy strings tuned to b to match your 7 string

that's what I mean actually

Why not get a Dean Z or X?

http://www.zzounds.com/item--DNEZMM

Great bass, I have the X and currently use it record my band 54R. Sounds great and I picked up a new one on ebay for 70 bucks.

I have a cheapo rogue 5 string that I got for something like $170, and it's been great. Nothing to write home about, but it sounds good, it's comfortable to play, holes it's tune, good fretwork, intonation is spot on. I have no complaints.

Here it is. Apparently no longer available:
http://www.musiciansfriend.com/bass/rog ... ass-guitar

But Rogue also makes a 5 string with jazz pickups for like $150, so there you go. You don't need an alembic for a learner's bass.

ShaolinLambKiller also brings up a good point - check eBay.