MCLEAN, Va.--Nov. 5, 2001--Gladstone Capital Corporation (NASDAQ:GLAD) announced today that it is approximately 45 days behind it original schedule to close loans in the year ending September 2002. While lending requests are brisk, the Company may not be able to complete enough loans to meet the original schedule.

A company spokesperson for Gladstone Capital said: We now believe that since closings on new loans are at a slower pace, the shareholders and analyst that follow the company should reduce their projected loan closings by an amount equal to the amount of closings they assumed for 45 days period. The very strong downward turn of the economy has reduced the number of new buyout transactions that are occurring. The Company is working hard on a large number of re-financings but these will take time. We feel good about the future of loan closings but want everyone to know that the near term has been impacted somewhat by the very negative economic conditions.

For Further Information Contact David Gladstone at 703 744 1165.

This press release may include statements that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements with regard to the future performance of the Company. Words such as "believes" and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements include, among others, those factors listed under the caption "Risk factors" of the Company's prospectus dated August 23, 2001, as filed with the Securities and Exchange Commission on August 24, 2001. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.