Northern Businesses Warn of Cash Crisis as War Damage Claims Lag

Business owners in northern Israel told the Knesset Finance Committee on Tuesday that the war with Hezbollah has left them facing severe cash-flow problems, delayed claims processing, and in some cases a real risk of closure. Several described a grim summer ahead, saying, "the diaries for July and August are empty." Others said they were met with an antagonistic response from officials, including, "I was told either close the file or move to the back of the line."

The hearing focused on the condition of businesses in the north, where claim bottlenecks, especially in the so-called red track, have slowed compensation and deepened the damage. Despite the complaints, many speakers also said employees of the Property Tax Compensation Fund were available around the clock and genuinely trying to help.

The fund's director said 663,000 claims have been filed under the "Iron Swords" war, and about 6,000 are still being handled, less than 1%. He said, "We are not able to save all the businesses, we try to reach everyone, but we will not succeed in saving everyone," comparing the situation to missiles penetrating Israel's air defenses. He added that the compensation fund has paid nearly 28 billion shekels in indirect damages, including 4.5 billion shekels in border-adjacent communities and 6.5 billion shekels if the northern Golan and Upper Galilee are included.

MKs sharply criticized the Finance Ministry for lacking a long-term plan or strategic horizon for the region. MK Oded Forer said the government must give manufacturers reasons to build in the north, not only repair damage after the fact. Committee chair MK Moshe Mibilvitsky demanded an active protective framework for the area and said he would hold another discussion next week.

The Tax Authority said its system for new claims covering May and June in eligible northern areas will open in the coming days, allowing more businesses to seek compensation. Lawmakers and business owners said immediate aid is not enough, and that the north needs a durable plan to recover and grow.