Exhibit 99.1

 Gladstone Capital Corporation Announces Exit of Portfolio Investment

    MCLEAN, Va.--(BUSINESS WIRE)--Sept. 20, 2006--Gladstone Capital
Corporation (Nasdaq:GLAD) (the "Company") announced today that it has
received total proceeds of approximately $7 million from the exit of
Gammill, Inc., a portfolio company, including exit and prepayment fees
of $787,000. The prepayment and exit fees will be reported in this
quarter as ordinary income for financial reporting purposes according
to Accounting Principles Generally Accepted in the United States, and
are anticipated to be treated as a capital gain for tax purposes.
    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 please contact Investor Relations 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, as amended, including statements with regard
to the future performance of the Company and the closing of any
transaction. Words such as "may," "will," "believes," "anticipates,"
"intends," "expects," "projects," "estimates" 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 Company's
Form 10-Q dated June 30, 2006, as filed with the Securities and
Exchange Commission on August 1, 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