McLean, VA: Gladstone Capital Corp. (NASDAQ: GLAD) announced today that through its subsidiary it has entered into a credit agreement arranged by CIBC World Markets Corp. as the structuring agent. The agreement provides Gladstone Capital with a revolving credit line facility of $100 million. The facility is the first step toward securitizing the Company's loans for long term funding.

" In anticipation of using the remaining amount of our cash for new loans, we felt it was wise to put our line of credit in place," said the Company. "Having the flexibility of a line of credit for future loan production is essential to the Company's growth. This credit line is similar to the lines of credit that other lending institutions rely on to grow their businesses. The Company intends to work with CIBC World Markets once the credit line reaches capacity to securitize its loans, markets permitting. With the $100 million line of credit and the $130 million of equity, the Company will seek to make loans totaling $230 million. The Company currently has $100 million in loans."

For further information please contact Skye Breeden at
(703) 286-0775.

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.