Option 2: Configure sshd to allow SFTP
Review the sshd configuration on the Linux server you are attempting to add to Veeam Backup & Replication and enable SFTP.
Generally speaking, this is controlled by a line in the /etc/ssh/sshd_config file starting with:
Subsystem sftp <binary_path> #example only
Where <binary_path> is the path to the SFTP server binary used by the Linux distribution.
Note: In most distributions, SFTP is enabled by default, therefore if it has become disabled it may have been disabled intentionally for security reasons. If for security reasons SFTP cannot be enabled, review Option 3 below.