diff --git a/sweepbatcher/sweep_batcher_test.go b/sweepbatcher/sweep_batcher_test.go
new file mode 100644
index 0000000..2d233b9
--- /dev/null
+++ b/sweepbatcher/sweep_batcher_test.go
@@ -0,0 +1,986 @@
+package sweepbatcher
+
+import (
+	"context"
+	"strings"
+	"testing"
+	"time"
+
+	"github.com/btcsuite/btcd/btcutil"
+	"github.com/btcsuite/btcd/chaincfg/chainhash"
+	"github.com/btcsuite/btcd/wire"
+	"github.com/lightninglabs/loop/loopdb"
+	"github.com/lightninglabs/loop/test"
+	"github.com/lightningnetwork/lnd/chainntnfs"
+	"github.com/lightningnetwork/lnd/lntypes"
+	"github.com/stretchr/testify/require"
+)
+
+const (
+	swapInvoice = "lntb1230n1pjjszzgpp5j76f03wrkya4sm4gxv6az5nmz5aqsvmn4" +
+		"tpguu2sdvdyygedqjgqdq9xyerxcqzzsxqr23ssp5rwzmwtfjmsgranfk8sr" +
+		"4p4gcgmvyd42uug8pxteg2mkk23ndvkqs9qyyssq44ruk3ex59cmv4dm6k4v" +
+		"0kc6c0gcqjs0gkljfyd6c6uatqa2f67xlx3pcg5tnvcae5p3jju8ra77e87d" +
+		"vhhs0jrx53wnc0fq9rkrhmqqelyx7l"
+
+	eventuallyCheckFrequency = 100 * time.Millisecond
+
+	ntfnBufferSize = 1024
+)
+
+func testMuSig2SignSweep(ctx context.Context,
+	protocolVersion loopdb.ProtocolVersion, swapHash lntypes.Hash,
+	paymentAddr [32]byte, nonce []byte, sweepTxPsbt []byte,
+	prevoutMap map[wire.OutPoint]*wire.TxOut) (
+	[]byte, []byte, error) {
+
+	return nil, nil, nil
+}
+
+var dummyNotifier = SpendNotifier{
+	SpendChan:    make(chan *wire.MsgTx, ntfnBufferSize),
+	SpendErrChan: make(chan error, ntfnBufferSize),
+	QuitChan:     make(chan bool, ntfnBufferSize),
+}
+
+// TestSweepBatcherBatchCreation tests that sweep requests enter the expected
+// batch based on their timeout distance.
+func TestSweepBatcherBatchCreation(t *testing.T) {
+	defer test.Guard(t)()
+
+	lnd := test.NewMockLnd()
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	store := loopdb.NewStoreMock(t)
+
+	batcherStore := NewStoreMock()
+
+	batcher := NewBatcher(lnd.WalletKit, lnd.ChainNotifier, lnd.Signer,
+		testMuSig2SignSweep, nil, lnd.ChainParams, batcherStore, store)
+	go func() {
+		err := batcher.Run(ctx)
+		if !strings.Contains(err.Error(), "context canceled") {
+			require.NoError(t, err)
+		}
+	}()
+
+	// Create a sweep request.
+	sweepReq1 := SweepRequest{
+		SwapHash: lntypes.Hash{1, 1, 1},
+		Value:    111,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{1, 1},
+			Index: 1,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap1 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 111,
+		},
+
+		SwapInvoice: swapInvoice,
+	}
+
+	err := store.CreateLoopOut(ctx, sweepReq1.SwapHash, swap1)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Deliver sweep request to batcher.
+	batcher.sweepReqs <- sweepReq1
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	// Insert the same swap twice, this should be a noop.
+	batcher.sweepReqs <- sweepReq1
+
+	// Once batcher receives sweep request it will eventually spin up a
+	// batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Create a second sweep request that has a timeout distance less than
+	// our configured threshold.
+	sweepReq2 := SweepRequest{
+		SwapHash: lntypes.Hash{2, 2, 2},
+		Value:    222,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{2, 2},
+			Index: 2,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap2 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance - 1,
+			AmountRequested: 222,
+		},
+		SwapInvoice: swapInvoice,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq2.SwapHash, swap2)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	batcher.sweepReqs <- sweepReq2
+
+	// Batcher should not create a second batch as timeout distance is small
+	// enough.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Create a third sweep request that has more timeout distance than
+	// the default.
+	sweepReq3 := SweepRequest{
+		SwapHash: lntypes.Hash{3, 3, 3},
+		Value:    333,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{3, 3},
+			Index: 3,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap3 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance + 1,
+			AmountRequested: 333,
+		},
+		SwapInvoice: swapInvoice,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq3.SwapHash, swap3)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	batcher.sweepReqs <- sweepReq3
+
+	// Batcher should create a second batch as timeout distance is greater
+	// than the threshold
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 2
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since the second batch got created we check that it registered its
+	// primary sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	require.Eventually(t, func() bool {
+		// Verify that each batch has the correct number of sweeps in it.
+		for _, batch := range batcher.batches {
+			switch batch.primarySweepID {
+			case sweepReq1.SwapHash:
+				if len(batch.sweeps) != 2 {
+					return false
+				}
+
+			case sweepReq3.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+			}
+		}
+
+		return true
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Check that all sweeps were stored.
+	require.True(t, batcherStore.AssertSweepStored(sweepReq1.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq2.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq3.SwapHash))
+}
+
+// TestSweepBatcherSimpleLifecycle tests the simple lifecycle of the batches
+// that are created and run by the batcher.
+func TestSweepBatcherSimpleLifecycle(t *testing.T) {
+	defer test.Guard(t)()
+
+	lnd := test.NewMockLnd()
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	store := loopdb.NewStoreMock(t)
+
+	batcherStore := NewStoreMock()
+
+	batcher := NewBatcher(lnd.WalletKit, lnd.ChainNotifier, lnd.Signer,
+		testMuSig2SignSweep, nil, lnd.ChainParams, batcherStore, store)
+	go func() {
+		err := batcher.Run(ctx)
+		if !strings.Contains(err.Error(), "context canceled") {
+			require.NoError(t, err)
+		}
+	}()
+
+	// Create a sweep request.
+	sweepReq1 := SweepRequest{
+		SwapHash: lntypes.Hash{1, 1, 1},
+		Value:    111,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{1, 1},
+			Index: 1,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap1 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 111,
+		},
+		SwapInvoice:     swapInvoice,
+		SweepConfTarget: 111,
+	}
+
+	err := store.CreateLoopOut(ctx, sweepReq1.SwapHash, swap1)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Deliver sweep request to batcher.
+	batcher.sweepReqs <- sweepReq1
+
+	// Eventually request will be consumed and a new batch will spin up.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// When batch is successfully created it will execute it's first step,
+	// which leads to a spend monitor of the primary sweep.
+	<-lnd.RegisterSpendChannel
+
+	// Find the batch and assign it to a local variable for easier access.
+	batch := &batch{}
+	for _, btch := range batcher.batches {
+		if btch.primarySweepID == sweepReq1.SwapHash {
+			batch = btch
+		}
+	}
+
+	require.Eventually(t, func() bool {
+		// Batch should have the sweep stored.
+		return len(batch.sweeps) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// The primary sweep id should be that of the first inserted sweep.
+	require.Equal(t, batch.primarySweepID, sweepReq1.SwapHash)
+
+	err = lnd.NotifyHeight(601)
+	require.NoError(t, err)
+
+	// After receiving a height notification the batch will step again,
+	// leading to a new spend monitoring.
+	require.Eventually(t, func() bool {
+		return batch.currentHeight == 601
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Create the spending tx that will trigger the spend monitor of the
+	// batch.
+	spendingTx := &wire.MsgTx{
+		Version: 1,
+		// Since the spend monitor is registered on the primary sweep's
+		// outpoint we insert that outpoint here.
+		TxIn: []*wire.TxIn{
+			{
+				PreviousOutPoint: sweepReq1.Outpoint,
+			},
+		},
+		TxOut: []*wire.TxOut{
+			{
+				PkScript: []byte{3, 2, 1},
+			},
+		},
+	}
+
+	spendingTxHash := spendingTx.TxHash()
+
+	// Mock the spend notification that spends the swap.
+	spendDetail := &chainntnfs.SpendDetail{
+		SpentOutPoint:     &sweepReq1.Outpoint,
+		SpendingTx:        spendingTx,
+		SpenderTxHash:     &spendingTxHash,
+		SpenderInputIndex: 0,
+		SpendingHeight:    601,
+	}
+
+	// We notify the spend.
+	lnd.SpendChannel <- spendDetail
+
+	// After receiving the spend, the batch is now monitoring for confs.
+	<-lnd.RegisterConfChannel
+
+	// The batch should eventually read the spend notification and progress
+	// its state to closed.
+	require.Eventually(t, func() bool {
+		return batch.state == Closed
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	err = lnd.NotifyHeight(604)
+	require.NoError(t, err)
+
+	// We mock the tx confirmation notification.
+	lnd.ConfChannel <- &chainntnfs.TxConfirmation{
+		Tx: spendingTx,
+	}
+
+	// Eventually the batch receives the confirmation notification and
+	// confirms itself.
+	require.Eventually(t, func() bool {
+		return batch.isComplete()
+	}, test.Timeout, eventuallyCheckFrequency)
+}
+
+// TestSweepBatcherSweepReentry tests that when an old version of the batch tx
+// gets confirmed the sweep leftovers are sent back to the batcher.
+func TestSweepBatcherSweepReentry(t *testing.T) {
+	defer test.Guard(t)()
+
+	lnd := test.NewMockLnd()
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	store := loopdb.NewStoreMock(t)
+
+	batcherStore := NewStoreMock()
+
+	batcher := NewBatcher(lnd.WalletKit, lnd.ChainNotifier, lnd.Signer,
+		testMuSig2SignSweep, nil, lnd.ChainParams, batcherStore, store)
+	go func() {
+		err := batcher.Run(ctx)
+		if !strings.Contains(err.Error(), "context canceled") {
+			require.NoError(t, err)
+		}
+	}()
+
+	// Create some sweep requests with timeouts not too far away, in order
+	// to enter the same batch.
+	sweepReq1 := SweepRequest{
+		SwapHash: lntypes.Hash{1, 1, 1},
+		Value:    111,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{1, 1},
+			Index: 1,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap1 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 111,
+		},
+		SwapInvoice:     swapInvoice,
+		SweepConfTarget: 111,
+	}
+
+	err := store.CreateLoopOut(ctx, sweepReq1.SwapHash, swap1)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	sweepReq2 := SweepRequest{
+		SwapHash: lntypes.Hash{2, 2, 2},
+		Value:    222,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{2, 2},
+			Index: 2,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap2 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 222,
+		},
+		SwapInvoice:     swapInvoice,
+		SweepConfTarget: 111,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq2.SwapHash, swap2)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	sweepReq3 := SweepRequest{
+		SwapHash: lntypes.Hash{3, 3, 3},
+		Value:    333,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{3, 3},
+			Index: 3,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap3 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 333,
+		},
+		SwapInvoice:     swapInvoice,
+		SweepConfTarget: 111,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq3.SwapHash, swap3)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Feed the sweeps to the batcher.
+	batcher.sweepReqs <- sweepReq1
+
+	// After inserting the primary (first) sweep, a spend monitor should be
+	// registered.
+	<-lnd.RegisterSpendChannel
+
+	batcher.sweepReqs <- sweepReq2
+
+	batcher.sweepReqs <- sweepReq3
+
+	// Batcher should create a batch for the sweeps.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Find the batch and store it in a local variable for easier access.
+	b := &batch{}
+	for _, btch := range batcher.batches {
+		if btch.primarySweepID == sweepReq1.SwapHash {
+			b = btch
+		}
+	}
+
+	// Batcher should contain all sweeps.
+	require.Eventually(t, func() bool {
+		return len(b.sweeps) == 3
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Verify that the batch has a primary sweep id that matches the first
+	// inserted sweep, sweep1.
+	require.Equal(t, b.primarySweepID, sweepReq1.SwapHash)
+
+	// Create the spending tx. In order to simulate an older version of the
+	// batch transaction being confirmed, we only insert the primary sweep's
+	// outpoint as a TxIn. This means that the other two sweeps did not
+	// appear in the spending transaction. (This simulates a possible
+	// scenario caused by RBF replacements.)
+	spendingTx := &wire.MsgTx{
+		Version: 1,
+		TxIn: []*wire.TxIn{
+			{
+				PreviousOutPoint: sweepReq1.Outpoint,
+			},
+		},
+		TxOut: []*wire.TxOut{
+			{
+				Value:    int64(sweepReq1.Value.ToUnit(btcutil.AmountSatoshi)),
+				PkScript: []byte{3, 2, 1},
+			},
+		},
+	}
+
+	spendingTxHash := spendingTx.TxHash()
+
+	spendDetail := &chainntnfs.SpendDetail{
+		SpentOutPoint:     &sweepReq1.Outpoint,
+		SpendingTx:        spendingTx,
+		SpenderTxHash:     &spendingTxHash,
+		SpenderInputIndex: 0,
+		SpendingHeight:    601,
+	}
+
+	// Send the spending notification to the mock channel.
+	lnd.SpendChannel <- spendDetail
+
+	// After receiving the spend notification the batch should progress to
+	// the next step, which is monitoring for confirmations.
+	<-lnd.RegisterConfChannel
+
+	// Eventually the batch reads the notification and proceeds to a closed
+	// state.
+	require.Eventually(t, func() bool {
+		return b.state == Closed
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// While handling the spend notification the batch should detect that
+	// some sweeps did not appear in the spending tx, therefore it redirects
+	// them back to the batcher and the batcher inserts them in a new batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 2
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since second batch was created we check that it registered for its
+	// primary sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	// We mock the confirmation notification.
+	lnd.ConfChannel <- &chainntnfs.TxConfirmation{
+		Tx: spendingTx,
+	}
+
+	// Eventually the batch receives the confirmation notification,
+	// gracefully exits and the batcher deletes it.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Find the other batch, which includes the sweeps that did not appear
+	// in the spending tx.
+	b = &batch{}
+	for _, btch := range batcher.batches {
+		b = btch
+	}
+
+	// After all the sweeps enter, it should contain 2 sweeps.
+	require.Eventually(t, func() bool {
+		return len(b.sweeps) == 2
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// The batch should be in an open state.
+	require.Equal(t, b.state, Open)
+}
+
+// TestSweepBatcherNonWalletAddr tests that sweep requests that sweep to a non
+// wallet address enter individual batches.
+func TestSweepBatcherNonWalletAddr(t *testing.T) {
+	defer test.Guard(t)()
+
+	lnd := test.NewMockLnd()
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	store := loopdb.NewStoreMock(t)
+
+	batcherStore := NewStoreMock()
+
+	batcher := NewBatcher(lnd.WalletKit, lnd.ChainNotifier, lnd.Signer,
+		testMuSig2SignSweep, nil, lnd.ChainParams, batcherStore, store)
+	go func() {
+		err := batcher.Run(ctx)
+		if !strings.Contains(err.Error(), "context canceled") {
+			require.NoError(t, err)
+		}
+	}()
+
+	// Create a sweep request.
+	sweepReq1 := SweepRequest{
+		SwapHash: lntypes.Hash{1, 1, 1},
+		Value:    111,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{1, 1},
+			Index: 1,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap1 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 111,
+		},
+		IsExternalAddr: true,
+		SwapInvoice:    swapInvoice,
+	}
+
+	err := store.CreateLoopOut(ctx, sweepReq1.SwapHash, swap1)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Deliver sweep request to batcher.
+	batcher.sweepReqs <- sweepReq1
+
+	// Once batcher receives sweep request it will eventually spin up a
+	// batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	// Insert the same swap twice, this should be a noop.
+	batcher.sweepReqs <- sweepReq1
+
+	// Create a second sweep request that has a timeout distance less than
+	// our configured threshold.
+	sweepReq2 := SweepRequest{
+		SwapHash: lntypes.Hash{2, 2, 2},
+		Value:    222,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{2, 2},
+			Index: 2,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap2 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance - 1,
+			AmountRequested: 222,
+		},
+		SwapInvoice:    swapInvoice,
+		IsExternalAddr: true,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq2.SwapHash, swap2)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	batcher.sweepReqs <- sweepReq2
+
+	// Batcher should create a second batch as first batch is a non wallet
+	// addr batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 2
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	// Create a third sweep request that has more timeout distance than
+	// the default.
+	sweepReq3 := SweepRequest{
+		SwapHash: lntypes.Hash{3, 3, 3},
+		Value:    333,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{3, 3},
+			Index: 3,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap3 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance + 1,
+			AmountRequested: 333,
+		},
+		SwapInvoice:    swapInvoice,
+		IsExternalAddr: true,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq3.SwapHash, swap3)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	batcher.sweepReqs <- sweepReq3
+
+	// Batcher should create a new batch as timeout distance is greater than
+	// the threshold
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 3
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	require.Eventually(t, func() bool {
+		// Verify that each batch has the correct number of sweeps in it.
+		for _, batch := range batcher.batches {
+			switch batch.primarySweepID {
+			case sweepReq1.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+
+			case sweepReq2.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+
+			case sweepReq3.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+			}
+		}
+
+		return true
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Check that all sweeps were stored.
+	require.True(t, batcherStore.AssertSweepStored(sweepReq1.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq2.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq3.SwapHash))
+}
+
+// TestSweepBatcherComposite tests that sweep requests that sweep to both wallet
+// addresses and non-wallet addresses enter the correct batches.
+func TestSweepBatcherComposite(t *testing.T) {
+	defer test.Guard(t)()
+
+	lnd := test.NewMockLnd()
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	store := loopdb.NewStoreMock(t)
+
+	batcherStore := NewStoreMock()
+
+	batcher := NewBatcher(lnd.WalletKit, lnd.ChainNotifier, lnd.Signer,
+		testMuSig2SignSweep, nil, lnd.ChainParams, batcherStore, store)
+	go func() {
+		err := batcher.Run(ctx)
+		if !strings.Contains(err.Error(), "context canceled") {
+			require.NoError(t, err)
+		}
+	}()
+
+	// Create a sweep request.
+	sweepReq1 := SweepRequest{
+		SwapHash: lntypes.Hash{1, 1, 1},
+		Value:    111,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{1, 1},
+			Index: 1,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap1 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111,
+			AmountRequested: 111,
+		},
+
+		SwapInvoice: swapInvoice,
+	}
+
+	err := store.CreateLoopOut(ctx, sweepReq1.SwapHash, swap1)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Create a second sweep request that has a timeout distance less than
+	// our configured threshold.
+	sweepReq2 := SweepRequest{
+		SwapHash: lntypes.Hash{2, 2, 2},
+		Value:    222,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{2, 2},
+			Index: 2,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap2 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance - 1,
+			AmountRequested: 222,
+		},
+		SwapInvoice: swapInvoice,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq2.SwapHash, swap2)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Create a third sweep request that has less timeout distance than the
+	// default max, but is not spending to a wallet address.
+	sweepReq3 := SweepRequest{
+		SwapHash: lntypes.Hash{3, 3, 3},
+		Value:    333,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{3, 3},
+			Index: 3,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap3 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance - 3,
+			AmountRequested: 333,
+		},
+		SwapInvoice:    swapInvoice,
+		IsExternalAddr: true,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq3.SwapHash, swap3)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Create a fourth sweep request that has a timeout which is not valid
+	// for the first batch, so it will cause it to create a new batch.
+	sweepReq4 := SweepRequest{
+		SwapHash: lntypes.Hash{4, 4, 4},
+		Value:    444,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{4, 4},
+			Index: 4,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap4 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance + 1,
+			AmountRequested: 444,
+		},
+		SwapInvoice: swapInvoice,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq4.SwapHash, swap4)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Create a fifth sweep request that has a timeout which is not valid
+	// for the first batch, but a valid timeout for the new batch.
+	sweepReq5 := SweepRequest{
+		SwapHash: lntypes.Hash{5, 5, 5},
+		Value:    555,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{5, 5},
+			Index: 5,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap5 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance + 5,
+			AmountRequested: 555,
+		},
+		SwapInvoice: swapInvoice,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq5.SwapHash, swap5)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Create a sixth sweep request that has a valid timeout for the new
+	// batch, but is paying to a non-wallet address.
+	sweepReq6 := SweepRequest{
+		SwapHash: lntypes.Hash{6, 6, 6},
+		Value:    666,
+		Outpoint: wire.OutPoint{
+			Hash:  chainhash.Hash{6, 6},
+			Index: 6,
+		},
+		Notifier: &dummyNotifier,
+	}
+
+	swap6 := &loopdb.LoopOutContract{
+		SwapContract: loopdb.SwapContract{
+			CltvExpiry:      111 + defaultMaxTimeoutDistance + 6,
+			AmountRequested: 666,
+		},
+		SwapInvoice:    swapInvoice,
+		IsExternalAddr: true,
+	}
+
+	err = store.CreateLoopOut(ctx, sweepReq6.SwapHash, swap6)
+	require.NoError(t, err)
+	store.AssertLoopOutStored()
+
+	// Deliver sweep request to batcher.
+	batcher.sweepReqs <- sweepReq1
+
+	// Once batcher receives sweep request it will eventually spin up a
+	// batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	// Insert the same swap twice, this should be a noop.
+	batcher.sweepReqs <- sweepReq1
+
+	batcher.sweepReqs <- sweepReq2
+
+	// Batcher should not create a second batch as timeout distance is small
+	// enough.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 1
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	batcher.sweepReqs <- sweepReq3
+
+	// Batcher should create a second batch as this sweep pays to a non
+	// wallet address.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 2
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	batcher.sweepReqs <- sweepReq4
+
+	// Batcher should create a third batch as timeout distance is greater
+	// than the threshold.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 3
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	batcher.sweepReqs <- sweepReq5
+
+	// Batcher should not create a fourth batch as timeout distance is small
+	// enough for it to join the last batch.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 3
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	batcher.sweepReqs <- sweepReq6
+
+	// Batcher should create a fourth batch as this sweep pays to a non
+	// wallet address.
+	require.Eventually(t, func() bool {
+		return len(batcher.batches) == 4
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Since a batch was created we check that it registered for its primary
+	// sweep's spend.
+	<-lnd.RegisterSpendChannel
+
+	require.Eventually(t, func() bool {
+		// Verify that each batch has the correct number of sweeps in
+		// it.
+		for _, batch := range batcher.batches {
+			switch batch.primarySweepID {
+			case sweepReq1.SwapHash:
+				if len(batch.sweeps) != 2 {
+					return false
+				}
+
+			case sweepReq3.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+
+			case sweepReq4.SwapHash:
+				if len(batch.sweeps) != 2 {
+					return false
+				}
+
+			case sweepReq6.SwapHash:
+				if len(batch.sweeps) != 1 {
+					return false
+				}
+			}
+		}
+
+		return true
+	}, test.Timeout, eventuallyCheckFrequency)
+
+	// Check that all sweeps were stored.
+	require.True(t, batcherStore.AssertSweepStored(sweepReq1.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq2.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq3.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq4.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq5.SwapHash))
+	require.True(t, batcherStore.AssertSweepStored(sweepReq6.SwapHash))
+}