diff --git a/itest/lspd_test.go b/itest/lspd_test.go
index 69dfb93..b7c2ca3 100644
--- a/itest/lspd_test.go
+++ b/itest/lspd_test.go
@@ -85,4 +85,8 @@ var allTestCases = []*testCase{
 		name: "testFailureBobOffline",
 		test: testFailureBobOffline,
 	},
+	{
+		name: "testNoBalance",
+		test: testNoBalance,
+	},
 }
diff --git a/itest/no_balance_test.go b/itest/no_balance_test.go
new file mode 100644
index 0000000..251f753
--- /dev/null
+++ b/itest/no_balance_test.go
@@ -0,0 +1,55 @@
+package itest
+
+import (
+	"log"
+	"time"
+
+	"github.com/breez/lntest"
+	lspd "github.com/breez/lspd/rpc"
+	"github.com/stretchr/testify/assert"
+)
+
+func testNoBalance(p *testParams) {
+	alice := lntest.NewClnNode(p.h, p.m, "Alice")
+	alice.Start()
+	alice.Fund(10000000)
+
+	log.Print("Opening channel between Alice and the lsp")
+	channel := alice.OpenChannel(p.lsp.LightningNode(), &lntest.OpenChannelOptions{
+		AmountSat: publicChanAmount,
+	})
+	channelId := alice.WaitForChannelReady(channel)
+
+	log.Printf("Adding bob's invoices")
+	outerAmountMsat := uint64(2100000)
+	innerAmountMsat, lspAmountMsat := calculateInnerAmountMsat(p.lsp, outerAmountMsat)
+	description := "Please pay me"
+	innerInvoice, outerInvoice := GenerateInvoices(p.BreezClient(),
+		generateInvoicesRequest{
+			innerAmountMsat: innerAmountMsat,
+			outerAmountMsat: outerAmountMsat,
+			description:     description,
+			lsp:             p.lsp,
+		})
+
+	log.Print("Connecting bob to lspd")
+	p.BreezClient().Node().ConnectPeer(p.lsp.LightningNode())
+
+	log.Printf("Registering payment with lsp")
+	RegisterPayment(p.lsp, &lspd.PaymentInformation{
+		PaymentHash:        innerInvoice.paymentHash,
+		PaymentSecret:      innerInvoice.paymentSecret,
+		Destination:        p.BreezClient().Node().NodeId(),
+		IncomingAmountMsat: int64(outerAmountMsat),
+		OutgoingAmountMsat: int64(lspAmountMsat),
+	})
+
+	// TODO: Fix race waiting for htlc interceptor.
+	log.Printf("Waiting %v to allow htlc interceptor to activate.", htlcInterceptorDelay)
+	<-time.After(htlcInterceptorDelay)
+
+	log.Printf("Alice paying")
+	route := constructRoute(p.lsp.LightningNode(), p.BreezClient().Node(), channelId, lntest.NewShortChanIDFromString("1x0x0"), outerAmountMsat)
+	_, err := alice.PayViaRoute(outerAmountMsat, outerInvoice.paymentHash, outerInvoice.paymentSecret, route)
+	assert.Contains(p.t, err.Error(), "WIRE_TEMPORARY_CHANNEL_FAILURE")
+}