The Hong Kong government has approved the first two projects under its Film Guarantee Fund (FGF) initiative, designed to help local production companies secure bank loans for film production.

The first project, Shaolin Vs Evil Dead (working title), produced by My Way Film Company, has secured a loan of US$320,000 (HK$2.5m) from HKCB Finance, a subsidiary of CITIC Ka Wah Bank.

Under the terms of the scheme, the government will guarantee 50% of the loan, up to a maximum of US$337,000. Only Hong Kong-registered companies are eligible to apply and applicants should have produced at least three theatrical films from 1992 to 2001.

The Hong Kong government's Television and Entertainment Licensing Authority (TELA) also announced that a second project has been approved under the FGF and has secured a US$600,000 loan from HSBC. However, the producers of the project requested TELA not to name it.

Shaolin Vs Evil Dead, which is currently shooting in Hong Kong and China, is directed by Douglas Keung and produced by former female action star, Yang Pan-pan. The film stars Fan Siu Wong and Lau Ka-Fai (also known as Gordon Liu) who appears in Quentin Tarantino's upcoming Kill Bill.

Founded in 1986, My Way has produced more than 200 films including action adventure, drama, thrillers and erotica. The company also buys product for distribution in Asia and is the exclusive sales agent for Europe of programming produced by Hong Kong broadcaster TVB.

The FGF also requires that each proposed project has a "completion arrangement" in place, which may either be a completion bond or any other measure "acceptable to the lender to ensure completion of the film". Shaolin Vs Evil Dead is not bonded, but the producers put up company assets as collateral to satisfy the bank.