The bank says it's willing to give the Republic Windows and Doors factory "a limited amount of additional loans" so it can resolve claims of employees who have staged a sit-in since Friday.
The factory closed last Friday after Bank of America canceled its financing.
Workers were given three days notice. But they refused to leave and vowed to stay there until receiving assurances they would receive severance and accrued vacation pay.
The bank has been criticized for cutting off the plant's credit after taking federal bailout money.
The sit-in by more than 200 workers at the factory stretched into its fifth day on Tuesday.
The workers' siege was the subject of a three-hour meeting Monday night that included representatives from Republic, Bank of America, the employees' union, U.S. Rep. Luis Gutierrez, D-Ill., and Illinois Treasurer Alexi Giannoulias.
The workers complained that they were not receiving severance pay, accrued vacation pay or other benefits due them under the federal Worker Adjustment and Retraining Notification Act (WARN), which covers employees who lose their jobs in a plant closing or other mass layoff.
Since then, about 200 of the 240 laid-off workers have taken turns occupying the factory, declaring they will not leave until getting assurances they will receive what is due - and they are preventing the products their labor built from being removed from the premises.
Ricardo Caceres, 39, of Chicago has worked for Republic for 15 years as a window assembler.
"I'm confused and angry and wondering what's going on," Caceres said Monday. "I don't have money right now, I don't have a job."
The workers show up in groups of 50 or 60 to occupy the plant around the clock in eight-hour shifts.
On Monday community leaders handed out $5,000 worth of food and toys to the families of the workers, reports WBBM.
The standoff has come to embody mounting anger over the government's willingness to bail out deep-pocketed corporations but not average people, notes one labor organizer.
"There's a simplicity and straightforwardness to this particular case that anybody can wrap their head around," James Thindwa, executive director for Jobs With Justice in Chicago, told WBBM.
The protest - along with vocal support from President-elect Barack Obama, Illinois Gov. Rod Blagojevich, civil rights activists and others - has also created something else: A chance for unions that have been losing members and strength for years to show they still matter.
"I hope it's the beginning of a real fight-back movement," said Leah Fried, an organizer for the United Electrical Workers, which represents the Republic workers, who are mostly Hispanic.
The workers say the company violated the WARN Act because employees were not given 60 days' notice that they were losing their jobs.
Blagojevich on Monday ordered all state agencies to stop doing business with Bank of America to pressure the bank into using federal bailout money it received to help the laid-off workers.
Meanwhile, on charges he brazenly conspired to sell or trade Obama's vacant Senate seat to the highest bidder as part of what federal prosecutors called a "political corruption crime spree."