Gladstone Capital : Investor Presentation – September 30, 2021

Investor Presentation for the Fiscal Quarter Ended

September 30, 2021

FINANCING FOR LOWER MIDDLE-MARKETCOMPANIES

Legal Disclaimer

Forward-LookingStatements:This presentation may include "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. These forward-looking statements may include comments with respect to our objectives and strategies, and the results of our operations and our business.

These forward-looking statements inherently involve numerous risks, assumptions, and uncertainties, both general and specific. The risk exists that these statements may not be fulfilled. Although these statements are based on information available to us as of the date of this presentation, which we believe is reasonable, we caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of known and unknown factors could cause future results to differ materially from these statements, including those factors listed under the caption "Risk Factors" in our Form 10-K and Form 10-Q filings, our registration statement, and other filings we may make with the Securities and Exchange Commission, all of which can be found on our web site at www.GladstoneCapital.comor the SEC's web site, www.SEC.gov.

Forward-looking statements may be influenced in particular by factors such as the overall impact of the COVID-19 pandemic and other health emergencies, fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political, regulatory and technological conditions. We caution that the foregoing list is not exhaustive. When considering forward-looking statements when making decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events.

Past or Present Performance Disclaimer:This presentation includes information regarding our past or present performance. Please note, past or present performance is not a guarantee of future performance or future results. We undertake no obligation to update the information contained herein to reflect subsequently occurring events or circumstances, except as required by applicable securities laws and regulations.

**Amounts in tables and charts in thousands, except for share and per share amounts and as otherwise stated.

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Gladstone Capital Overview

Background:

• Founded in 2001, Gladstone Capital was one of the first business development companies (BDC) focused on making loans to lower middle market U.S. businesses ($3-15MM of EBITDA) and today the investment team remains dedicated to the BDC's activities and performance and thus aligned with the BDC's investors
• Gladstone Capital is funded through publicly traded common stock (Nasdaq: GLAD) and is leveraged via various senior unsecured note issues and a bank revolving credit facility
• Managed by Gladstone Management Corporation, an SEC registered investment adviser that manages in excess of $3.6 billion in assets across four publicly traded yield-oriented funds with significant insider equity holdings and history of shareholder friendly actions to support fund distributions

Investment Strategy:

• Target current yield investments in growth-oriented companies with proven cashflows, where capital flexibility is highly valued to support attractive investment yields
• Growth equity valuations support proportionately greater equity contributions and reduce the investment risk profile, while revenue growth also provides a path to organic deleveraging and alternative repayment options
• Majority of investments are backed by private equity sponsors, which provide institutional governance, strategic sector insight, experience managing leveraged balance sheets and investment capacity to support business
• Leverage seasoned origination team to source, structure and pro-actively manage investments to mitigate losses

Investment Profile (as of September 30, 2021):

• $558 million portfolio at fair value diversified across 46 companies and 16 different industries
• Conservative asset mix with 85% of investments in secured loans, 61% in lower risk 1st lien loans and weighted average EBITDA leverage across core proprietary loan portfolio of 3.6x
• Attractive weighted average portfolio yield of 10.3%, which is modestly leveraged (0.78:1 debt/equity) to generate a distribution yield on net asset value of 8.4%

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Why Invest in a BDC?

BDCs are regulated by the SEC, which mandates asset diversity, investor transparency via quarterly SEC filings including fair value adjustments of all assets and limits financial leverage to a maximum of 2:1 debt to equity leverage.

BDCs typically operate as regulated investment companies for tax purposes and pay no corporate income taxes, provided they distribute at least 90% of taxable income and all earnings and gains are passed through to investors.

Investment Profile

• Competitive returns - Current yields typically exceed other yield-oriented investment alternatives
• Limited interest rate risk - Distributions backed by floating rate loans supporting increased distributions as interest rates rise
• Credit protection - Distributions generated by a diversified portfolio of secured loans
• Investment liquidity - Established public equity market for common stock
• Experienced credit managers - Experience and capital base structured to manage loan portfolio through various business cycles to minimize credit losses

(1)	PowerShares Exchange-Traded Fund Trust II - Senior Loan Portfolio (BKLN) - Yield 9/30/2021	(4)	Raymond James 11/18/2021 BDC Industry Investment Banking Weekly Newsletter
(2)	S&P MLP Index Dividend Yield - 9/30/2021	(5)	GLAD's stock price as of 9/30/2021
(3)	BAML US High Yield Master II Index - Effective Yield 9/30/2021	(6)	For the three months ended September 30, 2021

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Gladstone Capital Strategy and Risk Management

Investment Strategy:

• Originate secured debt investments in established lower middle market companies with sustainable margins/cash flows and favorable growth characteristics, which can support a leveraged capital structure
• Target companies with operating cash flow (EBITDA) of $3-15 million and investments of $7-30 million
• Maintain industry and borrower diversity across added value businesses with revenue visibility or competitive barriers including specialty manufacturing, industrial or business services, or healthcare services, while avoiding financial services, early stage or high-tech companies, commodity or cyclical businesses

Deal Sourcing:

• Origination team provides regional coverage of middle market PE firms, investment banks and other deal sources
• Leverage seasoned investment team and dedicated lower middle market focus to deliver an elevated level of expertise to win investor-oriented financing solutions and actively manage ongoing investment portfolio risks
• Highly selective screening process where under 5% of deals reviewed ultimately close and the bulk of investments are backed by private equity (~80% of the portfolio at 9/30/21)

Due Diligence:

• Thorough multi-disciplinary "equity like" underwriting approach - blending internal industry experience, onsite visits and management assessments, supplemented with third party financial reviews, industry assessments, management background checks, and legal and insurance investigations, etc.

Risk Management:

• Gladstone Capital requires board level participation in portfolio companies to monitor operating performance and outlook to proactively manage risk profile
• Ongoing senior management reviews, quarterly third party expert investment valuations, and investments are subject to quarterly oversight by Gladstone Capital's audit committee and independent board members

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