McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) announced today that its net investment income for the first quarter ending December 31, 2002 was $2,412,154 or $0.24 per share for the quarter as compared to $1,196,980 or $0.12 per share for the quarter ending December 31, 2001 for an increase of 100%. Total assets were $173,410,821 at the end of December 2002 and $172,922,039 at the end of September 2002. The dividend for the December 2002 ending quarter was $0.23 per share.

The company said net investment income for the quarter ending December 31, 2002 improved for the first quarter of the year. Our company is profitable and paying dividends. The only question now is, when will the economy become strong enough to support the kinds of companies we seek? We continue to see negative news in the numbers being produced by our slow moving economy, nevertheless, the positive news is that most aspects of the economy are not getting worse. We worry that the impending war will slow some industries even more.

With this as a backdrop, we worry about the prospects of another dip in the economy in the near term. We do not see strong backlogs in the businesses we review and most industrial concerns are not seeing strong sales. We are approaching each new opportunity with caution. Since the end of the quarter we closed one loan and another one is closing, but our activity is still slow. Information about investments is on our web site, www.GladstoneCapital.com.

The attached financial statements are without footnotes so readers should obtain Form 10-Q and review the notes as well. We have filed Form 10-Q with the Securities and Exchange Commission ('SEC') which can be retrieved at the SEC website at www.SEC.gov or at the company's web site at www.GladstoneCapital.com. A paper copy can be obtained by writing to us at 1616 Anderson Road, McLean, VA 22102.

For further information please contact Skye Breeden at (703) 286-0775. The company will have a conference call at 11:30 am EST, February 11, 2002. Please call 1+(800) 491-3127 and use the ID# 305-81-11 and you will be placed on hold until the conference starts. An operator will monitor the call and set a queue for the questions. The replay number is 1+(888) 211-2648.

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.