Exhibit 99.1

   Gladstone Capital Corporation Announces Optionees Acceptance to
                          Amend Stock Options

    MCLEAN, Va.--(BUSINESS WIRE)--June 1, 2006--Gladstone Capital
Corporation (Nasdaq:GLAD) (the "Company") announced today that its
offer to amend the terms of all stock options currently outstanding
(the "Options") under the Company's Amended and Restated 2001 Equity
Incentive Plan, as amended, to accelerate the expiration date of the
Options to September 30, 2006 (the "Offer") has been accepted. The
Offer was made to the executive officers and directors of the Company
and the employees of the Company's external investment adviser,
Gladstone Management Corporation who hold stock options (the
"Optionees"), and was conditional upon its acceptance by all of the
Optionees. All Optionees accepted the Offer prior to its expiration on
May 31, 2006.
    On April 11, 2006, the Company's Board of Directors accelerated in
full the vesting of all outstanding options other than options held by
the Company's non-employee Directors. Following the acceptance of the
Offer, all Options must be either exercised or terminated prior to
September 30, 2006.
    The Company intends to implement, effective October 1, 2006 the
proposed Investment Advisory and Management Agreement between the
Company and Gladstone Management Corporation and the Administration
Agreement between the Company and Gladstone Administration, LLC, a
wholly owned subsidiary of Gladstone Management Corporation, which was
approved by the Company's stockholders on December 2, 2005.
    The Company filed a Schedule TO and related documentation
regarding the offer with the Securities and Exchange Commission on
April 12, 2006.
    Gladstone Capital is a specialty finance company that invests in
debt securities consisting primarily of senior term loans, second lien
loans, and senior subordinate loans in small and medium sized
businesses. For more information please visit our website at
www.GladstoneCapital.com.
    For further information contact our Investor Relations Manager,
Kelly Sargent, at 703.287.5835.

    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
and Exchange Act of 1934, including statements with regard to the
offer to amend options, the outcome of the offer, and the
implementation of the proposed Investment Advisory and Management
Agreement with Gladstone Management Corporation and the Administration
Agreement with Gladstone Administration, LLC. However, the safe
harbors of Section 27A of the Securities Act of 1933, as amended and
21E of the Securities Exchange Act of 1934 do not apply to statements
made in connection with the offer. Words such as "believes, "expects,"
"intends," "projects" 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" in the
Company's Form 10-K dated September 30, 2005, as filed with the
Securities and Exchange Commission on December 13, 2005, and those
factors listed under the caption "Risk Factors" in the Offer to Amend
Options, dated April 12, 2006, filed as Exhibit 99(a)(1)(A) to the
Company's Schedule TO, as filed with the Securities and Exchange
Commission on April 12, 2006. 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.

    CONTACT: Gladstone Capital Corporation
             Kelly Sargent, 703-287-5835