The SQL Service is running under a Windows NT account and therefore doesn't have access to the backup location.

My understanding is that backup jobs run under the SQLAgentService login though and not the SQLService login so as long as the SQLAgent account is a domain account and has access to the backup folder it should be working.

Is this correct? Or do backups in fact run under the SQLService login and that login will need permissions to the backup folder and not the SQLAgent account?

If so I will need to change the SQLService login to a domain account so that I can provide it access to the backup folder that's on another server which i was hesitant on doing unless required as I'm trying to avoid restarting the server.