Abstract The ring-shaped structural-maintenance-of-chromosomes (SMC) complexes condensin and cohesin extrude loops of DNA as a key motif in chromosome organization. It remains, how ever, unclear how these SMC motor proteins can extrude DNA loops in chromatin that is bound with proteins. Here, using in vitro single-molecule visualization, we show that nucleosomes, RNA polymerase, and dCas9 pose virtually no barrier to DNA loop extrusion by yeast condensin. Strikingly, we find that even DNA-bound nanoparticles as large as 200 nm, much bigger than the SMC ring size, can be translocated into DNA loops during condensin-driven extrusion. Similarly, human cohesin can pass 200 nm particles during loop extrusion, which even occurs for a single-chain version of cohesin in which the ring-forming subunits are covalently linked and cannot open up to entrap DNA. These findings disqualify all common loop-extrusion models where DNA passes through the SMC rings (pseudo)topologically, and instead point to a nontopological mechanism for DNA loop extrusion. One-sentence summary Huge DNA-bound roadblocks can be incorporated into SMC-extruded DNA loops, pointing to a nontopological mechanism for loop extrusion.