So what can you do? Is there really a way to keep the filesizes down and have the music loop for all eternity? You bet Kung Fu Man's inability to rescue his girlfriend there is! Welcome to...
I basically take loopable music and find loop values for them; these values can then be read by M.U.G.E.N using the bgmloopstart and bgmloopend parameters, which serve as the two points between which the music will loop indefinitely. The Master List containing everything I've looped can be found here:
BGM Loops - PlasmoidThunder's Scrapheap
So how exactly do you use them? Each BGM in the Master List has the necessary bgmloopstart and bgmloopend values located directly underneath the download link, which can then be placed under the [Music] section of a stage's .def like so:
[Music] bgmusic = sound/Boss Battle.mp3 bgmloopstart = 186368 bgmloopend = 2894688
Now, the adventurous folk around here are likely aware of the BGM looping service I provide on Mugen Free For All and Mugen Guild, but I regret to inform you that I shall not be extending this service to GAMEBANANA. Simply put, I'm more active on MFFA and MFG compared to GAMEBANANA, plus I'd rather not have to check another place for loop requests.
That basically wraps it up. If you have any questions, drop a comment below.