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When deploying resource-intensive signal processing applications in wireless sensor or mesh networks, distributing processing blocks over multiple nodes becomes promising. Such distributed applications need to solve the placement problem (which block to run on which node), the routing problem (which link between blocks to map on which path between nodes), and the scheduling problem (which transmission is active when). We investigate a variant where the application graph may contain feedback loops and we exploit wireless networks' inherent multicast advantage. Thus, we propose Multicast-Aware Routing for Virtual network Embedding with Loops in Overlays (MARVELO) to find efficient solutions for scheduling and routing under a detailed interference model. We cast this as a mixed integer quadratically constrained optimisation problem and provide an efficient heuristic. Simulations show that our approach handles complex scenarios quickly.• We support overlay graphs with loops, as often found in signal processing applications. • We leverage the wireless multicast advantage as typical signal processing applications sending the same data to multiple receivers (e.g., in loops). • When scheduling wireless transmission, we consider interference from all sending nodes.