What it means
Funnels are linear: you pour traffic in the top and customers fall out the bottom, then you do it again. Loops are circular: a user takes an action (creates content, invites a colleague, generates a shareable result) that directly brings in new users, who do the same.
Why it matters
Paid funnels stop the moment you stop paying. Loops compound — each turn makes the next cheaper. The strongest businesses stack loops (content, viral, paid that funds more content) so growth is not wholly rented from ad platforms. Designing a loop is harder than buying clicks, and far more durable.