USB will work, but might be slow depending on the generation of USB. Hopefully it's not *so* old. You want USB 2.0 or newer.
The main risk with external USB drive on servers is accidental disconnection.
Workarounds:
• duct tape! (the universal solution!)
• some motherboards actually have USB ports right on the internal part of the board. Stick it there.
The last issue with external drives on servers is auto-mounting. You'll want to make sure the disk mounts automatically after a reboot, especially if you are setting up automated backups. Depending on the distro it might be easy or difficult.