When one hears about Iranian rocket attacks, what quickly comes to mind are destroyed buildings and displaced residents. However, many small businesses have also been hit and are now effectively in limbo as they wait for compensation.
Roli Smulevitch lost his business, Shwarma Haturki, on the Friday of the war. Located at 44 Bilu Street in Rehovot between the bustling shuk and the mall, the eatery was gutted by a rocket strike that also destroyed six buildings. The restaurant, known for its prime spot overlooking one of the city’s busiest roads and markets, has been a local fixture for the past 15 years.
The financial blow is severe. Smulevitch estimates his cost of reopening a new shwarma restaurant at between NIS 750,000 to NIS 1.2 million ($220,000 to $350,000). However, he has been frustrated by the bureaucratic challenges of compensation, which includes what he said is the “designation by the Tax Authority as a general citizen, versus, say, a resident of the Otef [Gaza border region] or far North, therefore limiting reimbursement.”
“I am designated by the Tax Authority like a bomb fell as a general attack or terrorist event and can receive limited compensation,” he said, based on what he has been told. “Instead of 100% compensation, we will receive 30% to 50% of physical value only. Note: What they told me covers physical damage only, not operational costs and other expenses involved. I find myself at a massive loss to start again,” he lamented.
Regarding offers to help, Bank Hapolaim has agreed to assist – but with a catch. “Everything we pay; the issue isn’t taking a loan, the issue is paying back the loan,” he tells Channel 12 news. On a positive note, WOLT [delivery service] has also offered to assist. “The only business to give me a grant was WOLT, whose manager called and transferred to me NIS 10,000 as a first help, right to my bank account,” he said.
On Monday, June 23, the Finance Ministry presented a NIS 10 billion compensation package to small businesses, based on a similar mechanism used after the attacks on Oct. 7, 2023, according to a report on N12. “The new framework will apply retroactively from the start of the current conflict on June 13,” the ministry said, in an agreement with the chairman of the Business Sector and the Histadrut.
However, while the new proposal provides some compensation for loss of profits and wages, the mechanism for reimbursing small business owners for destroyed stores is not clear.
Andrew Keene, founder of ESEK, a social enterprise supporting Israeli small businesses, got stuck abroad and is now in Krakow, Poland, where he will host an exhibit of products from Israeli small businesses at the Jewish Culture Festival during the war.
He isn’t surprised by the climate of lack of support.
“The system is overwhelmed, there have been a skyrocketing number of compensation requests, and the government has been anything but helpful… forcing many business owners to eat the costs themselves,” he said, when reached by phone.
“There are loan funds, which are complicated to take up, forcing business owners to work with an underwriter and an economist,” which many small businesses do not want, being put under a magnifying glass for damage that was no fault of their own. Some businesses have been forced to rely on GoFundMe pages to reimburse costs, Keene noted.
Tips for small business from ESEK founder Andrew Keene
- Work with the local municipal department, with advisers who assist small businesses. They know the process of filing claims. However, because they are so backlogged, sometimes they tell people not to rebuild until they are assessed for damages.
- The organization Keren Shemesh, part of Bank HaOgen, provides services to small businesses, which includes mentorship and coaching. They also offer help connecting to rebuilding funds.
- Contact the Small Business Administration of the government – noting that it has received mixed reviews.
AACI, The Association of Americans and Canadians in Israel, has published data for English speakers about what they need to know if their property is damaged or destroyed:
Compensation from the Property Tax Authority is available for direct damage to property, such as buildings, vehicles, and home contents. It provides the following points:
- Damage must be documented immediately after impact: photos, videos – before any repair or cleanup.
- Do not move or repair anything without prior approval from a Property Tax Authority appraiser.
- Claims must be submitted within 14 days to three months from the date of the damage.
Injuries (physical or emotional): Compensation may be available from the National Insurance Institute (Bituah Leumi), depending on the medical documentation.
Guide for civilians whose property was damaged in acts of war or hostility: https://www.gov.il/en/pages/guide-for-civilians-property-damaged-in-hostilities