You would need to compile a custom kernel that is capable of mounting loop devices, or find a custom kernel for that device that already has that feature built-in.
After a bit of digging, I found this guide on my phone's support forum. It's a bit dated, but the information is still relevant. It shows how to boot a Debian .img file. Unfortunately, it doesn't really detail EXACTLY what's needed for loop support, just that loop support is needed. But it is definitely possible, as I've personally run this on my phone for a short amount of time.