McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) indicated today that its second quarter production of new loan closings would be substantially below its original forecast. The company believes that the loans that would have closed in the second quarter ending March 31, 2002 should close in the third quarter ending June 30, 2002.

A spokesman for the company said: "Loan closings are difficult to predict and control because of the many parties involved in the process and the extensive list of due diligence items that must be completed before a loan can close. Predicting when a loan will close is a guess, at best. (A loan closing is when the legal documents are completed and agreed to, and the money actually passes from the lender to the borrower.)"

"We dislike missing the closings predicted in a quarter but quarters are artificial time measures and the wrecking yards are filled with companies that cut corners to meet quarterly expectations. Many of the items needed to close depend on others to complete, senior lenders, entrepreneurs and investors."

"We have been reluctant until this quarter to make commitments to companies due to the terrorist attacks and the poor economy, but now our pipeline of potential new loans is now full. We have almost $100 million of commitments coming though the due diligence process. We expect the quarter ending June 30 to be a strong one. Accordingly, we still expect to meet analysts predictions of earnings for the year ending, September 30, 2002."

"To facilitate our growth we are talking to bank and non-bank lenders about extending a line of credit to us that would be used in the fourth quarter ending September 30. We would use that borrowing to continue to make more new loans."

"The board of directors will meet on Thursday, March 14th to declare our quarterly dividend. We should announce the amount of the dividend in the afternoon of March 14th. We paid a quarterly cash dividend of $0.18 per share on January 15, 2002."

For further information about the company please go to the company’s web site www.GladstoneCapital.com or to the SEC website www.SEC.gov. For further information contact Harry Brill or David Gladstone at 703 286 7000.

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.