McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) announced today its Board of Directors has declared a fourth quarter cash dividend of $0.21 per share, payable on October 7, 2002 to shareholders of record on September 30, 2002.

Gladstone Capital offers a Dividend Reinvestment Plan (DRIP). For more information regarding this Plan, please visit their website at www.GladstoneCapital.com.

The company provides the estimated tax characteristics of its dividend on a quarterly basis and those estimates are subject to recharacterization. The current dividend is estimated to be a distribution of ordinary income. The actual tax characteristics will be reported to each shareholder on Form 1099 at the end of the tax year.

The Board also announced today that Chip Stelljes has joined the Company as the Chief Investment Officer, reporting to David Gladstone, CEO. Mr. Stelljes has been a member of the Board of Directors of the Company since the Initial Public Offering in August, 2001.

Mr. Stelljes was previously a General Partner of Camden Partners and Columbia Capital. He served as Executive Vice President and a member of the Investment Committee of Allied Capital Corporation from 1989 to 1997. "We are particularly proud to announce that Chip Stelljes has joined our organization as the Chief Investment Officer. His many years at Allied Capital, Columbia Capital and Camden Partners, will be of great benefit to our Company," said a spokesperson for the Company. "We believe that he can help us develop an even stronger credit culture and be a guiding light in making quality investments."

As part of his joining the management team, Mr. Stelljes has resigned from the Board of Directors so that the company will retain a majority of independent directors in compliance with applicable investment company rules. The company intends to have Mr. Stelljes re-join the board at a later date. Mr. Stelljes will join the board of directors of Gladstone Advisers, Inc.

For further information contact Skye Breeden or Harry Brill 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.