Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

On September 29, 2009, Gladstone Investment Corporation (the Company) purchased $85 million of short term United States Treasury securities from Jefferies & Company, Inc. (Jefferies). The securities were purchased with $10 million in funds drawn on the Company's credit facility, which accrues interest at an annual rate of approximately 7.0%, and the proceeds from a $75 million short term loan from Jefferies with an effective annual interest rate of approximately 0.65%. On October 1, 2009, when the securities matured, the Company repaid the $75 million loan from Jefferies in full. On October 2, 2009 the Company repaid the $10 million that had been drawn on the credit facility for the transaction.

Item 9.01 Financial Statements and Exhibits.

(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.

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