McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) announced today that its Net Increase in Stockholders' Equity Resulting from Operations for the second quarter ended March 31, 2003 was $3,662,015 or $0.36 per diluted common share for the quarter as compared to $1,408,482 or $0.14 per diluted common share for the quarter ended March 31, 2002 for an increase of $2,253,533 or 160%. Total assets were $199,846,757 at the end of March 2003 and $172,922,039 at the end of September 2002.

Net Increase in Stockholders' Equity Resulting from Operations for the six months ended March 31, 2003 was $6,074,170 or $0.60 per diluted common share as compared to $2,605,462 or $0.26 per diluted common share for the previous six months ended March 31, 2002. This leaves us with an increase of $3,468,708 or 133%.

As for the Net Investment Income for the quarter ended March 31, 2003, we saw an increase from $1,408,482 or $0.14 to $2,919,591 or $0.29 per diluted common share, a 107% increase from the prior year's quarter.

Net Investment Income for the six months ended March 31, 2003 was $5,331,746 or $0.53 per diluted common share as compared to $2,605,462 or $0.26 per diluted common share for the previous six months ended March 31, 2002. We see an increase of $2,726,284 or 105%.

During the quarter, Gladstone Capital refined its valuations by hiring Standard & Poor's Loan Evaluation Services to value some of its loan securities. This adds another positive dimension to the task of finding an accurate value for the company's securities.

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 from Gladstone Capitals 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 or Harry Brill at (703) 286-7000. The company will have a conference call at 11:30am EST, May 13, 2003. Please call 1-800-553-3594 and use the ID code 3555690 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 will be available at 4:00pm on May 13, 2003 for approximately 30 days. The replay number is 1-888-211-2648 and use ID code 3555690.

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.